Abstract: Consumers have different perceptions of shipping fees and sellers' preferences for online shopping. Through an analysis of the consumer purchasing behavior and the characterization of utility functions, the optimization decisions of bundled pricing and partitioned pricing are studied when online retailers are engaged in the joint pricing of products and shipping fees. The combination formats of price competition are discussed between online retailers. The available options for the optimal pricing are put forward, and the boundary and appropriate conditions for price decisions are demonstrated. It is revealed that the equilibrium is stable in symmetrical competition using bundled pricing between online retailers, and the relative size discipline of the profits under various competitive equilibriums. The conclusions show that the options of price decision are determined by the online retailer's product cost. For the given product cost, the boundary of each price decision depends on the attributes of consumers in the market, that is, the proportion of shipping-fee skeptics and the consumers' preference for sellers.

Key words: online retailing, bundled pricing, partitioned pricing, competitive equilibrium