Abstract
Virtual reality has become a new option to inform the customers about product before purchasing. However, providing virtual reality may create new challenges. For instance, consumers may obtain essential information about products by using virtual reality option, but eventually they buy their products from the offline channel. This phenomenon is called webrooming. Another challenge is cyber-attacks. E-tailers and their consumers face risks from cyber-attacks. Thus, e-tailers are investing to improve cybersecurity. We consider a dual-channel supply chain consisting of an offline retailer and an e-tailer who purchase the same product from a manufacturer at the same wholesale price. The e-tailer offers a partial refund policy in order to attract the customers. Also, to reduce consumer valuation uncertainty, the e-tailer faces the decision on whether to introduce virtual reality. We analyze three scenarios. Firstly, the e-tailer does not offer virtual reality. Secondly, the e-tailer offers virtual reality, but he does not invest on cybersecurity. Thirdly, the e-tailer offers virtual reality and invests on cybersecurity.
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Acknowledgements
This work was supported by the Korean Ministry of Science and ICT through the National Research Foundation (NRF) of Korea grant No. NRF-2022R1A2C1092077, and, also, by NRF grants 0536-20210093 and 21A20151113068 (BK21 Plus for Pioneers in Innovative Computing - Dept. of Computer Science and Engineering, SNU). The Institute of Engineering Research (IOER) and the Institute of Computer Technology (ICT) at Seoul National University provided research facilities for this study.
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Alaei, A.M., Rasti-Barzoki, M., Altmann, J., Egger, B. (2023). A Game-Theoretic Approach for Pricing and Determining Virtual Reality Investment and Cybersecurity Level in a Dual-Channel Supply Chain. In: Bañares, J.Á., Altmann, J., Agmon Ben-Yehuda, O., Djemame, K., Stankovski, V., Tuffin, B. (eds) Economics of Grids, Clouds, Systems, and Services. GECON 2022. Lecture Notes in Computer Science, vol 13430. Springer, Cham. https://doi.org/10.1007/978-3-031-29315-3_6
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