Group-buying price mechanism with two suppliers

Abstract

Group buying price (GBP) mechanism is a useful pricing mechanism in online selling. In this study, we focus on the case that buyers are small retailers, and there are two suppliers in the market. Retailers' ordering choice is discussed, and we also study how the supplier should set the GBP price curve. The conclusion shows that to beat the fixed price, the supplier should not use a small slope price curve. And retailers' group buying is not always better for the supplier.