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Online cooperation mechanism: game analysis between a restaurant and a third-party website

Author

Listed:
  • Jingmei Xu

    (University of Science and Technology of China)

  • Li Hu

    (University of Science and Technology of China)

  • Xiaolong Guo

    (University of Science and Technology of China)

  • Xia Yan

    (Southwest University of Science and Technology)

Abstract

Increasing numbers of restaurants pay a commission to seek a business relationship with a third-party website as an alternative distribution channel for traditional offline selling. Whether to build the cooperation and how to set the online marketing strategy are the major concern of these restaurants. In this paper, a Stackelberg game is established to study online pricing strategies of a restaurant, as well as the optimal service effort level of a third-party website. Two optimal cooperative strategies in different scenarios are obtained, which are comprehensively influenced by the restaurant’s retail price and the website’s user base.

Suggested Citation

  • Jingmei Xu & Li Hu & Xiaolong Guo & Xia Yan, 2020. "Online cooperation mechanism: game analysis between a restaurant and a third-party website," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(1), pages 61-73, February.
    • Handle: RePEc:pal:jorapm:v:19:y:2020:i:1:d:10.1057_s41272-018-00181-3
    DOI: 10.1057/s41272-018-00181-3
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    References listed on IDEAS

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    Cited by:

    1. Du, Zhong & Fan, Zhi-Ping & Chen, Zhongwei, 2023. "Implications of on-time delivery service with compensation for an online food delivery platform and a restaurant," International Journal of Production Economics, Elsevier, vol. 262(C).
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    3. Mohit Tyagi & Nomesh B. Bolia, 2022. "Approaches for restaurant revenue management," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(1), pages 17-35, February.

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