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J4  2017, Vol. 14 Issue (4): 609-    DOI:
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Selling Strategies of Multi-Categories on Network Platform: Product Market Risk and Scope Economies
WANG Ganfu,AI Xingzheng,ZHONG Li
University of Electronic Science and Technology of China, Chengdu, China

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Abstract  

This study investigate on an e-retailer who owns network platform and governs categories variety on platform. Incorporating product market risk and scope economies, a game model is developed to identify the characteristic of categories which are suitable for reselling modes(purchasing products form suppliers and selling them to consumers) or platform modes(on which suppliers sell their products directly to consumers) and the mechanism of accessing platform fee. The results show that the e-retailer prefers the profit sharing for accessing platform fee with product market risk. Under categories independent case, if the degree of scope economies is weak or it is strong and the product market risk is high, the e-retailer prefers the platform mode. If the degree of scope economies is strong and the product market risk is low, the e-retailer prefers the reselling mode. Under categories substitute case, the e-retailer’s strategies are affected by the number of categories and the degree of scope economies regarding the product market risk.

Key wordsscope economies      product risk      network platform     
Received: 29 September 2016     
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