Pricing Decision of E-Commerce Supply Chain with Reference Price Effect and Consumer Platform Preference

We study an E-commerce supply chain with the reference price effect in which consumers have different preferences for various platforms. Under two e-commerce platforms, we study the e-commerce commissions and pricing decision. For each e-commerce platform, we obtain the optimal equilibrium solution, and explore how reference price effect and consumer platform preference influence each member's optimal decisions. The results show that: (1) Under the two platforms e-commerce model, when online retailers only choose one to sell, they should choose to sell on a strong platform; When online retailers sell products on two platforms, the retailer's total profit is an increase function of reference price effect with a high reference price effect coefficient. Otherwise, the opposite is true. The profits increase with consumers’ platform preferences increase. (2) By comparison, when consumer platform preference is high, the profit of online retailers selling on two platforms is lower than selling on a single platform. As platform preference decreases, the profit of online retailers sell on two platforms will higher than on a single platform.