Does Online Retailers' Service Investment Matter? Optimal Reputation Certification Strategies for Hybrid E-Commerce Platforms

Hybrid e-commerce platforms have launched reputation certification strategies for third-party online retailers to encourage service investment. A crucial aspect of the reputation certification strategy is its potential impact on consumers' purchase decisions, affecting online retailers' service investment strategies. The study examines these problems by constructing four decision models of whether the online retailer invests when the platform does not launch reputation certification and whether the online retailer invests when the platform launches reputation certification. The study uses the game theory method to explore the impact of reputation certification strategies on the online retailer's service investment in a hybrid e-commerce platform. First, the platform launches reputation certification when its implementation cost is low, and the commission rate, the marketplace channel's retailing inefficiency, the reputation certification's inefficiency, and consumer sensitivity to service meet certain conditions. Second, reputation certification does not necessarily help the online retailer set higher prices, and a high reputation certification standard may hinder the online retailer from service investment. Finally, only when consumers' sensitivity to service is low, the launch of reputation certification by the platform will increase consumer welfare and social welfare, and service investment by the online retailer can always increase consumer surplus and social welfare. The findings provide new insights into hybrid e-commerce platforms that aim to launch reputation certification strategies.