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《Journal of Systems Science and Mathematical Sciences》 2019-06
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Optimal Return and Insurance Service Strategies for Online Retailers in the Presence of Opportunistic Consumers

ZHAO Qian;SUN Yanhong;SIQIN Tana;SHU-UTS SILC Business School, Shanghai University;  
Offering return insurance service can encourage more consumers to purchase the product,but it may also increase opportunistic consumers' wardrobing behavior.This paper studies the optimal return and insurance service strategies for online retailers in the presence of both regular consumers and opportunistic consumers.Through theoretical analyses we find that in comparison to the situation when not offering return insurance service,a low price of the return insurance service will promote consumer purchase;meanwhile,except for the situation where the price is relatively low,offering return insurance service will always increase the retailer's profit.Besides,the retailer offering return insurance service will always set a higher product price except when the consumers' wardrobing behavior is high and the product's trial value is high.Interestingly,it is also found that offering return insurance with price discrimination to different types of consumers can eliminate the negative effect of opportunistic wardrobing behavior.
【Fund】: 上海市“晨光计划”项目(15CG47);; 国家自然科学基金面上项目(71671108)资助课题
【CateGory Index】: F203;F832.4
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