New Findings on Electronic Commerce Described by Investigators at Dalian University of Technology (Design for the pricing strategy of return-freight…

New Findings on Electronic Commerce Described by Investigators at Dalian University of Technology (Design for the pricing strategy of return-freight insurance based on online product reviews)

By a News Reporter-Staff News Editor at Internet Business Newsweekly -- Current study results on Finance - Electronic Commerce have been published. According to news reporting originating in Liaoning, People's Republic of China, by VerticalNews journalists, research stated, "To resolve online shopping disputes with product return, some insurance companies have developed a new type of insurance called return-freight insurance to compensate consumers' loss of return-freight fees. Traditional insurance-premium determination (such as support vector machines) has not fully merged all e-commerce factors, such as the product-fit uncertainty of online shopping, that could affect both insurance demand and return quantity."

Financial support for this research came from Natural Science Foundation of China.

The news reporters obtained a quote from the research from the Dalian University of Technology, "Based on these traits, we develop a profit-maximization model in terms of certain market-reaction parameters, especially product-fit uncertainty, and calculate the optimal pricing strategy, including both the insurance premium and the compensation. Using prospect theory, we explain why online product review could influence insurance applicants' risk-averse behavior in the e-commerce situation. Then we solve for the reasonable premium and compensation given online product reviews from the insurance company's perspective and obtain a number of managerial guidelines for using marketing and operational-strategy variables to influence those reaction parameters so as to obtain the maximum benefit from the market."

According to the news reporters, the research concluded: "Interestingly, when consumers' sensitivity to product-fit uncertainty is moderate, an increase in product-fit uncertainty moves insurance premium and compensation in the opposite direction."

For more information on this research see: Design for the pricing strategy of return-freight insurance based on online product reviews. Electronic Commerce Research and Applications, 2017;25():16-28. Electronic Commerce Research and Applications can be contacted at: Elsevier Science Bv, PO Box 211, 1000 Ae Amsterdam, Netherlands. (Elsevier - www.elsevier.com; Electronic Commerce Research and Applications - www.journals.elsevier.com/electronic-commerce-research-and-applications/)

Our news correspondents report that additional information may be obtained by contacting S.D. Geng, Dalian University of Technology, Dept. of Management Sci & Engn, Dalian 116024, Liaoning, People's Republic of China. Additional authors for this research include W.L. Li, X.F. Qu and L.R. Chen.

The direct object identifier (DOI) for that additional information is: https://doi.org/10.1016/j.elerap.2017.05.001. This DOI is a link to an online electronic document that is either free or for purchase, and can be your direct source for a journal article and its citation.

Keywords for this news article include: Liaoning, People's Republic of China, Asia, Electronic Commerce, Finance, Article Review, Dalian University of Technology.

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