Recommendations and Cross-selling: Pricing Strategies when Personalizing Firms Cross-sell

• 成果类型: Article
• 署名作者: Ghoshal, Abhijeet; Mookerjee, Vijay S.; Sarkar, Sumit
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; University of Texas System; University of Texas Dallas
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.1080/07421222.2021.1912930
• 发表日期: 2021
• 页码: 430-456
• 关键词: consumer reviews; decision-making; product; COMPETITION; systems; IMPACT; MODEL

摘要

Recommender systems enable firms to target customers with products and services that better match their needs, as well as cross-sell products and services. Considering these factors in markets with monopoly and duopoly, we investigate (i) How do pricing strategies differ when firms cross-sell versus when they do not cross-sell, and (ii) How do these pricing strategies change when a firm improves its recommender system? We find that cross-selling can enable a monopolist to subsidize its price for the focal products, while maximizing its profit. In a duopoly, the price set by the firm with the inferior system (low-type firm) is always lower when the firms cross-sell than when the firms do not cross-sell; however, that does not necessarily hold for the hightype firm. When the high-type firm improves its recommender system, the low-type firm may decrease its price when firms cross-sell, which does not happen when firms do not cross-sell.