Game Theory Analysis of E-Commerce’s Price War
ABSTRACT
Home appliance industry is one of the most competitive industries in China, but the price war also prolonged. The reasons for E-commerce price war of home appliance industry are various; this article attempts to use the game theory and information economics analysis method to discuss the form of competition pattern, and further study the possibility of price coordination behavior in the industry. The analysis to our enlightenment is that, in order to get out of the price war trap, and improve the industry competition level, home appliance enterprises must pay more attention to technology and product innovation. At the same time, E-commerce should be rational to marketing strategy; it could avoid market competition environment destruction, and loss of consumer confidence caused by excessive price war in the adverse consequences.
Home appliance industry is one of the most competitive industries in China, but the price war also prolonged. The reasons for E-commerce price war of home appliance industry are various; this article attempts to use the game theory and information economics analysis method to discuss the form of competition pattern, and further study the possibility of price coordination behavior in the industry. The analysis to our enlightenment is that, in order to get out of the price war trap, and improve the industry competition level, home appliance enterprises must pay more attention to technology and product innovation. At the same time, E-commerce should be rational to marketing strategy; it could avoid market competition environment destruction, and loss of consumer confidence caused by excessive price war in the adverse consequences.
Cite this paper
Hu, Y. and Tang, M. (2014) Game Theory Analysis of E-Commerce’s Price War. iBusiness, 6, 189-194. doi: 10.4236/ib.2014.64019.
Hu, Y. and Tang, M. (2014) Game Theory Analysis of E-Commerce’s Price War. iBusiness, 6, 189-194. doi: 10.4236/ib.2014.64019.
References
[1] (2012) Documentary of the Price War in Appliance Home Industry on August 15—A War without Smoke of Gunpowder. PC online Exclusive Planning for Digital Home Appliance. http://www.pconline.com.cn/digital/815dsdz/ [2] Ouyang, Y.Y. and Tao, F. (2005) Price War and Coordination of China’s Appliance Home Industry—An Analysis Based on Game Theory. Business’s Modernization Academic Edition, 1. [3] Xie, S.Y. (2008) Economic Game Theory. 3rd Edition, Fudan University Press, Shanghai. [4] Zhang, W.Y. (2012) Game Theory and Information Economics. Gezhi Press, Shanghai. [5] Ye, Y.J. and Li, Q. (2007) Price War’s Game Theory Analysis and Strategy. Medium-Sized and Small Enterprises’ Science and Technology, 5. [6] Wang, K. and Tang, W.J. (2002) Game Theory Problems in Monopolistic Producers’ Product Pricing—An Simultaneous Comment on the Price War in Chinese Color Tv Industry. Academic Journal of Anhui University (Edition for Philosophy, Society and Science), 1. [7] Niu, G.Y. (2012) A Game Theory Based Analysis of the Tacit Knowledge Sharing and Incentive Mechanism. Advanced Materials Research, III.
[1] (2012) Documentary of the Price War in Appliance Home Industry on August 15—A War without Smoke of Gunpowder. PC online Exclusive Planning for Digital Home Appliance. http://www.pconline.com.cn/digital/815dsdz/ [2] Ouyang, Y.Y. and Tao, F. (2005) Price War and Coordination of China’s Appliance Home Industry—An Analysis Based on Game Theory. Business’s Modernization Academic Edition, 1. [3] Xie, S.Y. (2008) Economic Game Theory. 3rd Edition, Fudan University Press, Shanghai. [4] Zhang, W.Y. (2012) Game Theory and Information Economics. Gezhi Press, Shanghai. [5] Ye, Y.J. and Li, Q. (2007) Price War’s Game Theory Analysis and Strategy. Medium-Sized and Small Enterprises’ Science and Technology, 5. [6] Wang, K. and Tang, W.J. (2002) Game Theory Problems in Monopolistic Producers’ Product Pricing—An Simultaneous Comment on the Price War in Chinese Color Tv Industry. Academic Journal of Anhui University (Edition for Philosophy, Society and Science), 1. [7] Niu, G.Y. (2012) A Game Theory Based Analysis of the Tacit Knowledge Sharing and Incentive Mechanism. Advanced Materials Research, III.