@inproceedings{5adc804f45284be19f56898a29c557a1,
title = "Return Freight Insurance: Implications for Online Platforms, Third-party Retailers and Consumers",
abstract = "In this paper, we investigate the effect of return freight insurance (RFI) in an online platform setting where two competing third-party retailers provide RFI to consumers. First, we find that RFI generally increases the price level on the platform. Second, we find that when retailers have same base return rates, retailers' profits are not changed while the platform's profit is increased. Whereas, when retailers have different base return rates, RFI only benefits the retailer with high base return rate and harms the retailer with low base return rate, and RFI benefits the platform if and only if the product differentiation degree is relatively large. Third, we find RFI increases customer surplus if RFI's return hassle cost reduction (HCR) and/or willingness-to-pay enhancement (WTPE) effect is relatively strong. Moreover, we find RFI increases social welfare if RFI's HCR and/or WTPE effect is relatively strong and the product differentiation degree is relatively large. Such findings offer guidelines for online platforms and third-party retailers to design appropriate RFI provision strategies.",
keywords = "Game theory, Online platform, Online retailing, Return freight insurance, Return policy",
author = "Yiming Li and Gang Li and Cheng, {T. C.E.}",
year = "2018",
month = dec,
day = "27",
doi = "10.1109/LISS.2018.8593267",
language = "English",
series = "8th International Conference on Logistics, Informatics and Service Sciences, LISS 2018 - Proceeding",
publisher = "Institute of Electrical and Electronics Engineers Inc.",
editor = "Xiaopu Shang and Guowei Hua and Dash Wu and Runtong Zhang and Juliang Zhang and Anqiang Huang",
booktitle = "8th International Conference on Logistics, Informatics and Service Sciences, LISS 2018 - Proceeding",
note = "8th International Conference on Logistics, Informatics and Service Sciences, LISS 2018 ; Conference date: 03-08-2018 Through 06-08-2018",
}