Two Essays on Firm's Marketing Strategy: Auction Overlap Decision of Online Auctioneers and Product Positioning of Disadvantaged Firms

• Author / Creator

  Zhuang, Hejun

• Essay 1: Optimal Seller Strategy in Overlapping Auctions Overlapping auctions for identical products are commonly observed on auction websites. Such an on-line setting for competitive auctions changes the consumers’ bidding behaviours. Bidders are able to forward-look, cross-bid and learn during the bidding process. The change in the bidding behaviours has important implications for sellers’ revenue. We adopt a game-theoretical modelling method, aiming to understand—in a single-seller auctions website where the seller is able to decide auction design and bidders are able to forward-look, cross-bid, and learn—the existence of auctions’ overlapping. We also determine its value, pinpoint the factors influencing the degree of overlap, and solve the optimal degree of overlap under different conditions. We find that the degree of overlap depends on the trade-offs among four factors: bidders’ forward-looking, bidders’ learning, time discounting and varied demand. Hence, the combination of the impacts from these factors decides the optimal overlapping strategy of a revenue maximizing seller. Essay 2: Product Positioning Strategy of the Firms without a Competitive Advantage This essay examines the optimal product positioning strategy of asymmetric firms. Much of the theoretical discussion on firm strategies, such as technical investments and advertising, focuses on symmetric firms. Less attention is given to weak firms when they face strong companies such as IBM, Sony, GE, Apply and Wal-Mart. We find that weak firms position their products on areas which they are at advantages relative to their competitors. More importantly, they have an incentive to avoid close competition with strong firms by randomizing their product positions in the market if the advantage gap is still small, and to focus on the extreme edges of the market if the advantage gap is large. However, strong firms act in the opposite way: locating on mass market when the advantage gap is small, and randomizing their market positions and expand to on the edges of the market when the advantage gap is larger. Moreover, the strong firms make less on radical investment than on incremental on product’s features. These findings show the fundamentally different product positioning strategies under asymmetric competition than under symmetric one.

• Subjects / Keywords

  • Overlapping auctions
  • Bidders' learning
  • Positioning strategy

• Graduation date

  Fall 2014

• Type of Item

  Thesis

• Degree

  Doctor of Philosophy

• DOI

  https://doi.org/10.7939/R3KH0F90Q

• License

  This thesis is made available by the University of Alberta Libraries with permission of the copyright owner solely for non-commercial purposes. This thesis, or any portion thereof, may not otherwise be copied or reproduced without the written consent of the copyright owner, except to the extent permitted by Canadian copyright law.