Abstract:
This paper studies the pricing decisions of seed suppliers when seed purchase of farmers are influenced by consumer preference and herding psychology. Based on the Hotelling model and a linear consumer utility function, this paper establishes seed supplier decision models under three modes of service-sensitive, price-sensitive and mixed markets. The optimal profit, optimal additional service quality and optimal price for suppliers are derived with each model. Finally, the influence of the consumer significance level coefficient on supplier profit is analyzed by a numerical simulation. Results show that with the increase of herding psychology among consumers, the demand and profit of seed suppliers grow. In the three types of consumer markets, the impact of consumer attribute sensitivity on enterprise profit presents different relationships. In service-sensitive markets, the relationship between the two is as a convex function, with an optimal significance level. In price-sensitive markets, the increase of attribute sensitivity strengthens the growth of enterprise profit, while mixed markets need to be analyzed with the influence coefficient of additional service cost.