In group buying (GB), the retailer launches a deal with a discounted product price and a minimum group size requirement. Strategic consumers then determine whether to sign up for the GB deal or purchase the product at the regular price immediately. If GB fails, disappointed GB participants perceive a negative psychological utility and decide whether or not to buy it again at the regular price. Considering the disappointment caused by a GB failure, in our basic model, we formulate a two-period game to study the retailer’s optimal pricing decisions and consumers’ purchasing strategies. By deriving the likelihood function of a consumer signing up for the GB deal and utilizing rational expectations theory, we characterize how consumers form their own beliefs about the GB success rate. We find that consumer sentiment toward a failed GB deal serves an important role in a GB deal. Specifically, there exists a threshold of the disappointment factor where the retailer’s profit and consumers’ purchase decisions may change, and consumer leakage and retention may occur. We prove the existence of the subgame perfect Nash equilibrium and outline how the retailer should design the GB schedule. Our study shows that if properly designed, GB is an effective strategy to enhance consumer interests and improve profit. Moreover, a big discount should be offered when the disappointment factor is significant. When the consumer sentiment toward a failed GB deal is insignificant, the retailer should launch a GB deal; otherwise, he should provide the regular sales channel only. We conduct numerical experiments to study the impacts of different factors in a GB deal. Our key results continue to hold in several extensions from our basic model: retailer competition, observable secured group size, and social interactions between consumers.

中文翻译：

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团购，消费者对失败的交易感到失望


在团购 （GB） 中，零售商推出具有折扣商品价格和最低团体人数要求的促销。然后，战略消费者决定是注册 GB 交易还是立即以正常价格购买产品。如果 GB 失败，失望的 GB 参与者会认为这是一种负面的心理效用，并决定是否以正常价格再次购买。考虑到 GB 失败造成的失望，在我们的基本模型中，我们制定了一个两期博弈来研究零售商的最佳定价决策和消费者的购买策略。通过推导出消费者签署 GB 交易的似然函数并利用理性预期理论，我们描述了消费者如何形成自己对 GB 成功率的信念。我们发现，消费者对失败的 GB 交易的情绪在 GB 交易中起着重要作用。具体来说，存在一个失望因素阈值，零售商的利润和消费者的购买决定可能会发生变化，并且可能会出现消费者流失和留存。我们证明了子博弈完美纳什均衡的存在，并概述了零售商应该如何设计 GB 时间表。我们的研究表明，如果设计得当，GB 是提高消费者利益和提高利润的有效策略。此外，当失望因素很大时，应该提供很大的折扣。当消费者对失败的 GB 交易的情绪微不足道时，零售商应该发起 GB 交易;否则，他应该只提供常规销售渠道。我们进行数值实验，以研究不同因素对 GB 交易的影响。 我们的主要结果继续存在于我们基本模型的几个扩展中：零售商竞争、可观察的安全群体规模以及消费者之间的社交互动。