Managerial Overconfidence and Perceived Quality Congruence in E-Commerce Platform Systems: Pricing and Operational Mode Selection Under a Dynamic Game Framework

E-commerce platforms involve interactions among platform governance, manufacturer pricing, consumer perception, and managerial cognition. This study examines how platform overconfidence and consumer product-fit perception accuracy affect pricing, profitability, and operational mode selection. Product-fit perception accuracy denotes the probability that consumers correctly perceive the mismatch between their preferences and product attributes. We develop a two-period dynamic game involving two competing platforms and two manufacturers and compare resale and agency modes under simultaneous and sequential decisions. Equilibrium analysis shows that, under the agency mode, overconfidence increases promotional allowances and manufacturers’ first-period and switching-purchase prices, while its effect on repeat-purchase prices depends on a mismatch-cost threshold. Under the resale mode, overconfidence raises wholesale prices only within an intermediate range, and product-fit perception accuracy can have either a positive or negative effect depending on the level of overconfidence. Sequential decision-making further produces different pricing responses for leader and follower platforms due to differences in commitment and information conditions. Numerical analysis under the specified parameter settings indicates that resale tends to generate higher platform profits when consumers’ perceived product-quality level is high. When this level is low, the relative profitability of the two modes becomes more sensitive to overconfidence, product-fit perception accuracy, and decision position, with agency becoming more profitable in some parameter regions. These results characterize how governance mode and decision timing shape the economic consequences of managerial overconfidence and product-fit information within the modeled platform setting.

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Publication Details

Journal
Systems
Published
2026-09-11
DOI
https://doi.org/10.3390/systems14091138
Primary Topic
Digital Platforms and Economics
Type
article
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article

Managerial Overconfidence and Perceived Quality Congruence in E-Commerce Platform Systems: Pricing and Operational Mode Selection Under a Dynamic Game Framework

Bo Xie, Yingying Cheng, Qiqi Guo, Xuyang Gao
Systems
Digital Platforms and Economics
article

Managerial Overconfidence and Perceived Quality Congruence in E-Commerce Platform Systems: Pricing and Operational Mode Selection Under a Dynamic Game Framework

Bo Xie, Yingying Cheng, Qiqi Guo, Xuyang Gao
article en

Abstract

E-commerce platforms involve interactions among platform governance, manufacturer pricing, consumer perception, and managerial cognition. This study examines how platform overconfidence and consumer product-fit perception accuracy affect pricing, profitability, and operational mode selection. Product-fit perception accuracy denotes the probability that consumers correctly perceive the mismatch between their preferences and product attributes. We develop a two-period dynamic game involving two competing platforms and two manufacturers and compare resale and agency modes under simultaneous and sequential decisions. Equilibrium analysis shows that, under the agency mode, overconfidence increases promotional allowances and manufacturers’ first-period and switching-purchase prices, while its effect on repeat-purchase prices depends on a mismatch-cost threshold. Under the resale mode, overconfidence raises wholesale prices only within an intermediate range, and product-fit perception accuracy can have either a positive or negative effect depending on the level of overconfidence. Sequential decision-making further produces different pricing responses for leader and follower platforms due to differences in commitment and information conditions. Numerical analysis under the specified parameter settings indicates that resale tends to generate higher platform profits when consumers’ perceived product-quality level is high. When this level is low, the relative profitability of the two modes becomes more sensitive to overconfidence, product-fit perception accuracy, and decision position, with agency becoming more profitable in some parameter regions. These results characterize how governance mode and decision timing shape the economic consequences of managerial overconfidence and product-fit information within the modeled platform setting.

SystemsVol. 14(9)
Henan University of Science and Technology (CN), University of Reading (GB)
Openalex Percentile: Top 7%
Digital Platforms and Economics
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