Suchergebnisse

ABSTRACTTourist attractions, such as observatory decks, boat tours, and museums, have recently started to manage their operations via hiding some parts of their waiting lines, which we will refer to as queue disguising behavior. If customers are not aware of these disguised parts of the queues, firms can potentially boost their revenues by using queue disguising strategy. However, it is not obvious that firms benefit from disguised queues when customers retaliate after experiencing that the queue management tactics led them to make erroneous decisions. Our goal in this article is to investigate the impacts of the retaliatory customer behavior on firms' queue disguising decisions and profits. In the absence of retaliating customers, we find that the optimal queue disguising strategy yields only negligible profit improvements, relative to letting customers observe the entire waiting line. One, then, may expect that the queue disguising should not be a profitable strategy in a system with retaliating customers. We establish that this intuition is only true for firms incurring negligible holding costs. If keeping customers in the queue is sufficiently high for a firm, we, surprisingly, find that the firm achieves sizable profit improvements via queue disguising in the presence of the retaliatory behavior. More interestingly, we show that these benefits become more pronounced as the holding cost increases, in contrast to the case without retaliating customers. Our results, then, suggest that firms that are subjected to nonnegligible holding costs should employ the queue disguising strategy only while facing retaliating customers.

ABSTRACTMass customization provides a mechanism by which firms can better target a broad scope of consumer preferences and thus, in so doing, potentially increase their profits. We study product‐design and price competition between two mass‐customizing firms that serve consumers with varying tastes and finite reservation prices. Mass customization has recently received notable attention in both industry and academia, but yet there have been few studies concerning its impact in competitive settings. We contribute to this sparse literature by analyzing a two‐stage non‐cooperative game between two firms serving a Hotelling linear city. By comparing symmetric equilibrium results in settings with and without mass customization, we find that customization changes the nature of competition. More specifically, we show that with customization, a symmetric equilibrium emerges only if the firms' customization cost lies below a threshold, however, the magnitude of that cost does not influence product design decisions in equilibrium. We find that the equilibrium with customizing firms will not sustain cost levels above that threshold. Furthermore, we show that mass customizers earn higher equilibrium profits when consumers' fit sensitivity either significantly or only slightly exceeds the product valuation. On the contrary, traditional firms are better off when facing moderate fit sensitivity. We also establish that competition with mass customization may lead to lower profits and consumer surplus.