Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products
Probabilistic selling is a retail strategy in which consumers purchase products without knowing their exact identities until after purchase, with various applications like gaming and retail; a real-world practice involves retailers may unsealing and reselling goods to meet consumer demand for transp...
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MDPI AG
2025-06-01
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| Series: | Mathematics |
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| author | Pak Hou Che Yue Chen |
| author_facet | Pak Hou Che Yue Chen |
| author_sort | Pak Hou Che |
| collection | DOAJ |
| description | Probabilistic selling is a retail strategy in which consumers purchase products without knowing their exact identities until after purchase, with various applications like gaming and retail; a real-world practice involves retailers may unsealing and reselling goods to meet consumer demand for transparency. This disrupts manufacturers’ strategies designed to adopt the uncertainty for segmentation and pricing. Using a vertically differentiated supply chain model structured as a Stackelberg game framework, this study examines how transparency from retailer unsealing affects profitability, consumer surplus, and market dynamics. Key findings include the following: (1) Unsealing increases retailer profits by aligning pricing with heterogeneous consumer willingness to pay. (2) Introducing a manufacturer’s direct channel reduces unsealing profits via price competition. (3) Unsealing creates conflicts between manufacturers’ design goals and retailers’ profit-driven incentives. By applying a Stackelberg game framework to model unsealing as a downstream transparency decision, this work advances the probabilistic selling literature by offering a structured approach to analyzing how downstream transparency and retailer strategies reshape probabilistic selling and supply chain dynamics. It highlights the need for manufacturers to balance segmentation, pricing, and channel control, offering insights into mitigating conflicts between design intentions and downstream market behaviors. |
| format | Article |
| id | doaj-art-01453fb0ed9c4b0a98f2fb48dc2ffb4c |
| institution | Matheson Library |
| issn | 2227-7390 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | MDPI AG |
| record_format | Article |
| series | Mathematics |
| spelling | doaj-art-01453fb0ed9c4b0a98f2fb48dc2ffb4c2025-06-25T14:09:04ZengMDPI AGMathematics2227-73902025-06-011312203610.3390/math13122036Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated ProductsPak Hou Che0Yue Chen1School of Business, Macau University of Science and Technology, Macau 999078, ChinaSchool of Business, Macau University of Science and Technology, Macau 999078, ChinaProbabilistic selling is a retail strategy in which consumers purchase products without knowing their exact identities until after purchase, with various applications like gaming and retail; a real-world practice involves retailers may unsealing and reselling goods to meet consumer demand for transparency. This disrupts manufacturers’ strategies designed to adopt the uncertainty for segmentation and pricing. Using a vertically differentiated supply chain model structured as a Stackelberg game framework, this study examines how transparency from retailer unsealing affects profitability, consumer surplus, and market dynamics. Key findings include the following: (1) Unsealing increases retailer profits by aligning pricing with heterogeneous consumer willingness to pay. (2) Introducing a manufacturer’s direct channel reduces unsealing profits via price competition. (3) Unsealing creates conflicts between manufacturers’ design goals and retailers’ profit-driven incentives. By applying a Stackelberg game framework to model unsealing as a downstream transparency decision, this work advances the probabilistic selling literature by offering a structured approach to analyzing how downstream transparency and retailer strategies reshape probabilistic selling and supply chain dynamics. It highlights the need for manufacturers to balance segmentation, pricing, and channel control, offering insights into mitigating conflicts between design intentions and downstream market behaviors.https://www.mdpi.com/2227-7390/13/12/2036probabilistic sellingvertical differentiationretail management |
| spellingShingle | Pak Hou Che Yue Chen Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products Mathematics probabilistic selling vertical differentiation retail management |
| title | Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products |
| title_full | Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products |
| title_fullStr | Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products |
| title_full_unstemmed | Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products |
| title_short | Probabilistic Selling with Unsealing Strategy: An Analysis in Markets with Vertical-Differentiated Products |
| title_sort | probabilistic selling with unsealing strategy an analysis in markets with vertical differentiated products |
| topic | probabilistic selling vertical differentiation retail management |
| url | https://www.mdpi.com/2227-7390/13/12/2036 |
| work_keys_str_mv | AT pakhouche probabilisticsellingwithunsealingstrategyananalysisinmarketswithverticaldifferentiatedproducts AT yuechen probabilisticsellingwithunsealingstrategyananalysisinmarketswithverticaldifferentiatedproducts |