The sharing economy is of increasing importance for various aspects of our society by providing people with cost-efficient and convenient access to services or products. However, the profitability ...and healthy development of the sharing economy platforms are greatly restricted by the intensive uncertainties arising from product quality. How to determine the optimal product quality improvement efforts and the optimal prices for the sharing platforms becomes crucial. Moreover, it is reasonable that many sharing economy platforms and consumers are holding a risk-averse attitude during decision making in the highly volatile market. In this paper, we employ the Mean-Variance theory to model the risk-averse attitudes of decision makers, and analytically derive the optimal average quality levels and prices that the platform should provide for the market. We also explore how the critical factors like product quality uncertainty and risk sensitivity affect the platform's equilibrium decisions and consumer surplus. Our analytical results reveal the importance of reducing the difficulty of improving product quality for enhancing the platforms' profitability and consumer surplus. Besides, we identify that it is not always wise for platforms to invest in improving product quality, especially when the related cost becomes increasingly expensive. Moreover, it is shown that the increasing risk aversion or product quality volatility will induce the platform to reduce his quality improvement efforts. Finally, we interestingly find that the platform will always suffer if he becomes risk averse from risk neutral, while consumers may benefit from this attitude change.
With the growing requirements for green development, a firm's product quality matters greatly for targeting sustainable growth and industry improvements, thus it is vital to clarify the subtle ...relationship between environmental regulation and how firms improve product quality. This paper discusses the internal mechanisms of environmental regulation to improve the product quality during this green transformation period by enhancing the greenwashing capabilities of firms. Through matching and constructing a unique database including firm-level fundamental variables, product quality, and ESG information, we obtained a firm-level unbalanced dataset for the years 2013 and 2015. From this, we drew several findings. First, environmental regulations can help improve the quality of products. Specifically, environmental regulations cannot significantly and directly improve the product quality for heavy-pollution firms, and there is a positive and significant relationship between environmental regulation and product quality for low-pollution firms. Second, for heavy-pollution firms, environmental regulation has a negative and significant impact on product quality, which illustrates that greenwashing strongly motivates heavy-pollution firms and results in decreasing product quality. Third, financial constraints motivate the heavy-pollution firms to significantly decrease their product quality rather than improve it. Finally, there is a negative and significant effect on SOEs toward product quality improvement caused by environmental regulation for heavy-pollution industries. In the contrast, for low-pollution firms, SOEs are more incentivized to increase product quality.
•Environmental regulations can help improve the quality of products.•Environmental regulations cannot significantly improve the product quality for heavy-pollution firms.•Greenwashing strongly motivates heavy-pollution firms and results in decreasing product quality.•Financial constraints motivate the heavy-pollution firms to significantly decrease their product quality.
The phenomenon of copycats is common in a wide range of industries. Recently, to indicate product authenticity and combat copycats, many brand name companies (BNCs) have started selling products ...through retailers. These BNCs deploy a scalable protocol that is integrated into a permissioned blockchain technology (PBT) platform. We examine how PBT combats copycats in the supply chain and how it benefits BNCs. Although PBT implementation helps novice customers identify product authenticity and the real quality of products, that is, to take advantage of a quality disclosure effect, we show that, if and only if the number of novice customers is large enough, then selling through a PBT retailer can effectively combat copycats. Thus, PBT increases the profit of the BNC, consumer surplus, social welfare, and reduces the profit of a copycat. Moreover, conventional wisdom tells us that PBT ensures supply chain transparency and motivates a firm to improve its product quality. However, the BNC reduces the quality of its products when using PBT, because an improvement in product quality is not profitable if consumers can distinguish between genuine and imitation products. Furthermore, we extend the model by considering the case where the BNC itself implements PBT. Without the double marginalization effect, even if the number of novice customers is small, blockchain technology may exist in the market (the BNC self‐implements). In addition, if the unit production cost of a genuine product is large enough, social welfare increases when production cost increases.
Most of the existing studies on the dynamic evolution of Chinese export product quality have been analyzed from an empirical perspective, lacking theoretical investigation of its intrinsic evolution ...rules. Therefore, this paper defines the connotation of export product quality improvement (quantitative change of export product quality) and export product quality upgrading (qualitative change of export product quality), analysis the connection and difference between them, and constructs the corresponding evaluation indexes by referring to the rules of quantitative change and qualitative change in materialistic dialectics. Based on the data of Chinese industrial exporters from 2000 to 2013, the dynamic evolution of export product quality was measured statistically. The results of the research are as follows: (1) the overall export product quality of Chinese industrial enterprises showed a fluctuating upward trend. Among them, the export product quality of foreign-invested enterprises, large enterprises, and enterprises in the eastern region is higher. (2) From the dimension of quantitative change, the export product quality of Chinese industrial enterprises improved in 2001, 2003-2005, 2007, and 2011-2012, and there are some differences in the improvement of export product quality among enterprises of different ownership, scale, and regions. (3) From the dimension of qualitative change, the number of enterprises that achieve export product quality upgrading is increasing, and the mean and level of export product quality upgrading are improving. Among them, the export product quality upgrading of state-owned enterprises, large enterprises, and enterprises in the western region is higher.
What drives export quality? Using Portuguese firm-level data on exports by product and destination market, we find that f.o.b. unit values increase systematically with distance, and tend to be higher ...in shipments to richer nations. These relationships reflect not only the sorting of firms across markets, but also the within-firm variation of unit values across destinations. Within product categories, higher-productivity firms tend to ship greater quantities at higher prices to a given market, consistent with higher quality. In addition, firm productivity tends to magnify the positive effect of distance on within-product unit values, suggesting that high-productivity, high-quality firms are more able to serve difficult markets.
With the rapid development of online retail, many manufacturers selling through offline channels have also ventured into online selling. However, much literature indicates that these omnichannel ...sales, relative to single-channel sales, will lead to cross-channel spillovers, that is, the stimulation or cannibalization effect of online sales on offline sales. This paper studies the spillover effect on the price and quality decisions of competing manufacturers and how these manufacturers initially respond to the cross-channel spillovers by adjusting product strategies. In the model, an incumbent already sells product in online market and an entrant entering the market with its higher-quality product. Meanwhile, firms may have been selling through their respective offline channels. Results indicate that although the positive spillover of online sales stimulates offline sales, it strengthens online competition by reducing the equilibrium prices. Moreover, a spillover can enhance or reduce the entrant's quality level. Taking positive spillover for example, a firm prefers to enhance its product quality when its spillover is significantly smaller than its competitor's or when its spillover is slightly larger but its product quality improvement is limited. Moreover, we find that the entrant's (incumbent's) quality improvement can alleviate (strengthen) the effect of a spillover, which provides firms useful insights into managing spillovers.
•We study the effect of cross-channel spillovers on competing firms' price strategy.•We further consider the spillovers on competing firms' quality strategy.•We present how firms respond to the spillover by adjusting product strategies.•We examine the interplay of competition and the cross-channel spillover.•We verify the condition under which firm benefits from enhancing quality.
The fast and robust automated quality visual inspection has received increasing attention in the product quality control for production efficiency. To effectively detect defects in products, many ...methods focus on the hand-crafted optical features. However, these methods tend to only work well under specified conditions and have many requirements for the input. So the work in this paper targets on building a deep model to solve this problem. The elaborately designed deep convolutional neural networks (CNN) proposed by us can automatically extract powerful features with less prior knowledge about the images for defect detection, while at the same time is robust to noise. We experimentally evaluate this CNN model on a benchmark dataset and achieve a fast detection result with a high accuracy, surpassing the state-of-the-art methods.
•The disclosure effect of blockchain for secondhand product is examined.•Contributors consign secondhand products to an online platform that resells them.•Pricing strategies differ from the revenue ...sharing portion of the consignment contract.•Horizontal integration is more effective in improving the supply chain’s total profit with the use of blockchain.•A win-win-win outcome can be achieved in a supply chain that sells low-uniqueness products.
We examine the value of blockchain for disclosing secondhand product quality in a supply chain in which contributors consign secondhand products to an online platform that resells them and competes with suppliers of new products. We find that the platform is more likely to provide a uniform (differential) pricing strategy with new products when the revenue sharing portion of the consignment contract is sufficiently low (high). Moreover, surprisingly, without blockchain, the platform prefers moderately perceived and true quality secondhand products, instead of extremely high or low quality. With blockchain, the platform prefers selling low-uniqueness and low-quality (or high-uniqueness and high-quality) secondhand products. Furthermore, we find that with blockchain, horizontal integration is more effective in improving the supply chain’s total profit. A win-win-win outcome can be achieved for the platform, the supplier, and consumers in a supply chain that sells low-uniqueness products.
•Encroachment with quality decision under asymmetric information is studied.•Encroachment may lead to a lower quality.•Encroachment always benefits the manufacturer and may also benefit the ...retailer.•Asymmetric information may lead to a higher or lower quality.•The manufacturer may prefer to keep information disadvantages.
This paper investigates manufacturer encroachment with both endogenous quality decision and asymmetric demand information to examine the effects of encroachment and information structure on quality and profits for chain members. Manufacturer encroachment results in a signaling game where at equilibrium the retailer has to distort the order quantity downward under low market size. Our result shows that encroachment leads to a lower quality when the manufacturer’s direct selling cost is intermediate. The manufacturer always benefits from encroachment, and the retailer benefits from encroachment under an intermediate direct selling cost of the manufacturer since she can deter the manufacturer from selling directly to avoid channel competition. Results provide several information management implications. Compared to the full and no information cases, asymmetric information may increase quality when direct selling is relatively efficient while decrease quality otherwise. The manufacturer may prefer to keep information disadvantages when his direct selling cost is relatively large and the prior probability of large market size is high. Additionally, the informed retailer may be willing to share information to avoid the unexpected order quantity downward distortion in the case of asymmetric information when direct selling is efficient. As a result, the chain members reach a consensus on information sharing when the manufacturer’s direct selling cost is quite small or relatively large.
Firms'incentives to manufacture biased user reviews impede review usefulness. We examine the differences in reviews for a given hotel between two sites: Expedia. com (only a customer can post a ...review) and TripAdvisor. com (anyone can post). We argue that the net gains from promotional reviewing are highest for independent hotels with single-unit owners and lowest for branded chain hotels with multiunit owners. We demonstrate that the hotel neighbors of hotels with a high incentive to fake have more negative reviews on TripAdvisor relative to Expedia; hotels with a high incentive to fake have more positive reviews on TripAdvisor relative to Expedia.
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