OPTIMAL LOCATION AND PRICING OF DUOPOLY ONLINE RETAIL PRODUCTS: A SPATIAL SEARCH MODEL

摘要

The "top-of-the-web effect" in Internet advertising has attracted widespread attention, but the current theories are not satisfactory in explaining this phenomenon. The main reason is that same as offline markets the online market also has significant spatial attributes. In the past, most researches mainly focused on ranking search with time attribute as the core rather than page distance search. They ignore the impact of spatial search costs, can only analyze product page rankings, but cannot study product web site location. In this paper, by defining the buyer's expected return function of spatial search and search selection revenue function, we construct a model based on spatial search cost, and solve the problem of web site location and pricing of competitive online products. The research has found that approaching the top of the web page and choosing a location are not the optimal decision for all products. Platforms and online retail companies have endogenous motivations for quality false reports, and market competitiveness has nothing to do with search costs.