A GAME-THEORETIC APPROACH FOR PRICING AND DETERMINING VIRTUAL REALITY INVESTMENT IN A DUAL-CHANNEL SUPPLY CHAIN IN THE PRESENCE OF WEBROOMING AND RETURN POLICY

Today online retailers all over the world are looking to oer virtual reality service through their online channels in order to attract customers to purchase product online and increase sales by creating a sense of customer condence. Virtual reality service provides information about how a product ts a customer and closes the gap between online and oine retailers. However, such services also facilitate consumer webrooming behavior, which may reduce online demand and intensify competition between traditional and online retailers. Webrooming behavior means customers use virtual reality service in the online channel and view the specications of the product, but they buy the product in the oine channel. On the other hand, providing virtual reality through the online channel due to the conditions of the testing products before the purchase can have a positive impact on the rate of returned products. This study aims to investigate the optimal amount of investment in virtual reality service and its impact on the rate of return, as well as the impact of webrooming behavior on pricing and competition between the two channels. To address this issue, we develop a dual-channel supply chain including an online and a traditional retailer under two dierent scenarios. In the rst scenario, the online retailer oers a partial refund in his channel to attract customers, but he does not provide virtual reality service. In the second scenario, the online retailer provides virtual reality service in the online channel to compete with the traditional retailer. The results show that providing virtual reality will have a positive eect on the demand of both channels and will increase retail prices on both online and oine channels. Also, providing virtual reality in the online channel causes the customers to view and test the product before buying. Therefore, the number of returned products was reduced.