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Impacts of online consumer reviews on a dual-channel supply chain

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  • Yang, Wenjuan
  • Zhang, Jiantong
  • Yan, Hong

Abstract

This paper investigates the effects of online consumer reviews (OCRs) in a dual channel where the manufacturer distributes a product through a retail channel and an Internet channel. We develop game-theoretic models to capture both players’ pricing decisions and profits with OCRs, under two different channel structures. In specific, under the centralized channel, OCRs may increase or decrease the direct price but always lower the retail price. Under the decentralized channel, we show that the manufacturer has a higher probability to charge a higher direct price than under the centralized channel, and the retailer also has the chance to improve the retail price. Further, under the two channel settings, it is not necessarily wise for the manufacturer to provide OCRs in the Internet channel unless the information revealed by OCRs is sufficiently favorable.

Suggested Citation

  • Yang, Wenjuan & Zhang, Jiantong & Yan, Hong, 2021. "Impacts of online consumer reviews on a dual-channel supply chain," Omega, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:jomega:v:101:y:2021:i:c:s0305048318311320
    DOI: 10.1016/j.omega.2020.102266
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    8. Sun, Cuiying & Zhang, Xiong & Zhou, Yong-Wu & Cao, Bin, 2022. "Pricing, financing and channel structure for capital-constrained dual-channel supply chains with product heterogeneity," International Journal of Production Economics, Elsevier, vol. 253(C).
    9. Xijia Huang & Shuai Zhu & Jia Wang, 2021. "Optimal Emission Reduction and Pricing in the Tourism Supply Chain Considering Different Market Structures and Word-of-Mouth Effect," Sustainability, MDPI, vol. 13(7), pages 1-13, April.
    10. Siyu Shi & Chenyu Wang & T. C. Edwin Cheng & Shuai Liu, 2023. "Manufacturer encroachment with an e‐commerce division," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 2002-2019, June.
    11. Rezaei Kalantary, Mina & Hejazi, Seyed Reza & Khosroshahi, Hossein, 2023. "Pricing for different return policies in an online marketplace considering appeasement during a post-return out-of-stock," International Journal of Production Economics, Elsevier, vol. 266(C).
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