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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/14634
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| Title: | Asymmetric Consumer Learning and Inventory Competition |
| Authors: | Gaur, Vishal
Park, Young-Hoon |
| Keywords: | Asymmetric Consumer Learning
Customer Satisfaction
Inventory Competition
Retail Operations |
| Issue Date: | Feb-2005 |
| Publisher: | Stern School of Business, New York University |
| Series/Report no.: | OM-2005-05 |
| Abstract: | We develop a model of consumer learning and choice behavior in response
to uncertain service at the marketplace. Learning could be asymmetric,
i.e., consumers may associate different weights with positive and
negative experiences. Under this consumer model, we characterize the
steady-state distribution of demand for retailers given that each
retailer holds constant in-stock service level. We then consider a
non-cooperative game at the steady-state between two retailers competing
on the basis of their service levels. Our model yields a unique pure
strategy Nash equilibrium. We show that asymmetry in consumer learning
has a significant impact on the optimal service levels, market shares
and profits of the retailers. When retailers have different costs, it
also determines the extent of competitive advantage enjoyed by the lower
cost retailer. |
| URI: | http://hdl.handle.net/2451/14634 |
| Appears in Collections: | IOMS: Operations Management Working Papers
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