Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/43837
Title: Signalling effect of daily deal promotion for a start-up service provider
Authors: Zhao, M
Wang, Y 
Gan, X
Keywords: Advertising
Daily deal promotion
Quality
Repeat customer
Signaling
Issue Date: 2016
Publisher: Palgrave Macmillan
Source: Journal of the Operational Research Society, 2016, v. 67, no. 2, p. 280-293 How to cite?
Journal: Journal of the Operational Research Society 
Abstract: In this paper, we consider a start-up service provider that decides whether to advertise its service product by offering temporary daily deal promotion. Based on the repeat purchase mechanism, we show that both the commission rate (ie, the revenue-sharing ratio) charged by the daily deal site and the discount level offered by the service provider play important roles in signalling the initially unobservable quality level of the service provider. A high commission rate can facilitate the signalling of the daily deal promotion, and in equilibrium only the high-quality service provider would do daily deal promotion. We find that if the daily deal site adopts a two-part tariff charging scheme, the high-quality service provider can always signal its quality by offering daily deals. And the two-part tariff leads to a lower signalling cost but a higher repeat purchase rate than those under the revenue-sharing if the variable cost of the low-quality service provider is not too large.
URI: http://hdl.handle.net/10397/43837
ISSN: 0160-5682
EISSN: 1476-9360
DOI: 10.1057/jors.2014.47
Appears in Collections:Journal/Magazine Article

Access
View full-text via PolyU eLinks SFX Query
Show full item record

WEB OF SCIENCETM
Citations

1
Last Week
0
Last month
Citations as of Aug 21, 2017

Page view(s)

24
Last Week
1
Last month
Checked on Aug 20, 2017

Google ScholarTM

Check

Altmetric



Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.