Liking and Following and the Newsvendor: Operations and Marketing Policies Under Social Influence
研究垄断企业销售两种可替代产品时，消费者受社会影响（如他人购买决策）如何加剧需求不确定性、降低利润，并提出招募网红、减少产品种类或延迟生产等应对策略。
We consider a monopolistic firm selling two substitutable products to a stream of sequential arrivals whose purchase decisions can be influenced by earlier purchases. Before demand realizes, the firm faces a newsvendor problem for the two products with economies of scale in production for each. When consumers are responsive to others’ decisions, social influence amplifies demand uncertainty, leading to a lower profit for the firm. We propose three solutions for the firm to better cope with or even benefit from social influence: influencer recruitment and a reduced product assortment either before demand realization (ex ante) or under production postponement (ex post). First, the firm can offer promotional incentives to recruit consumers as influencers. We reveal an operational benefit of influencer marketing that a very small fraction of such influencers is sufficient to diminish sales’ unpredictability. Second, as the potential substitutability between products increases due to social influence, the firm may leverage the increased substitutability and enjoy lower cost in production by reducing product assortment before demand realization. Last, under production postponement, the firm can take advantage of the way that social influence results in demand herding and reduce product varieties by reacting to preorder information. This paper was accepted by Martin Lariviere, operations management.