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Growing Science » International Journal of Industrial Engineering Computations » Ordering and financing strategies in electronic business platform financing with a loss averse retailer

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International Journal of Industrial Engineering Computations
ISSN 1923-2934 (Online) - ISSN 1923-2926 (Print)
Quarterly Publication
Volume 16 Issue 4 pp. 979-1002, 2025

Ordering and financing strategies in electronic business platform financing with a loss averse retailer Pages 979-1002 PDF Download PDF

Authors: Liandi Zhang, Shenglin Ma, Na Hao, Wenping Li, Wenguang Tang

📋 Author Affiliations:
Liandi Zhang ORCID 1, Shenglin Ma ORCID 2, Na Hao1, Wenping Li ORCID 1, Wenguang Tang1
1 College of Science, Tianjin University of Commerce, China
2 School of Economics and Management, North University of China, China
doi 10.5267/j.ijiec.2025.8.005
Crossref 1 Source: CrossRef

🔑 Keywords: Supply chain management, Capital constraint, Loss aversion, Stackelberg game, Electronic business platform financing

Abstract: With the rapid growth of e-commerce, platform-based financing in electronic business (EB) has emerged as an innovative solution for online retailers facing capital constraints. This study develops a Stackelberg game-theoretic framework to analyze strategic financing decisions in a two-tier e-commerce supply chain, where an electronic business platform (EBP) , as the leader, assumes leadership by setting financing interest rates, while a capital-constrained, loss-averse online retailer (LOR), as the follower, optimizes order quantities and financing participation under behavioral risk preferences. A hierarchical game-theoretic framework is established to examine strategic interactions between an EBP and a LOR, and the equilibrium outcomes are given. The model derives optimal decisions for both financing rates and ordering strategies. Results demonstrate that when the retailer's initial capital grows, their necessity for external financing diminishes correspondingly, leading to smaller order quantities due to reduced bankruptcy risk. Moreover, higher levels of loss aversion cause retailers to order less and avoid financing, reflecting risk-sensitive behavior. The study also presents comprehensive numerical analyses to explore additional managerial implications, offering insights into how capital availability and behavioral factors like loss aversion shape decision-making in EB financing environments.

How to cite this paper
APA: Zhang, L., Ma, S., Hao, N., Li, W & Tang, W. (2025). Ordering and financing strategies in electronic business platform financing with a loss averse retailer. International Journal of Industrial Engineering Computations, 16(4), 979-1002.
Chicago/Turabian: Zhang, L., Ma, S., Hao, N., Li, W & Tang, W. 2025. "Ordering and financing strategies in electronic business platform financing with a loss averse retailer." International Journal of Industrial Engineering Computations 16, no. 4 (2025): 979-1002.
AMA: Zhang, L., Ma, S., Hao, N., Li, W & Tang, W. Ordering and financing strategies in electronic business platform financing with a loss averse retailer. International Journal of Industrial Engineering Computations. 2025;16(4):979-1002.

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📚 Journal: International Journal of Industrial Engineering Computations | 📅 Year: 2025 | 📖 Volume: 16 | 📄 Issue: 4 | 👁️ Views: 1132 | 📊 Crossref: 1

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