Opaque Selling Contracting Strategy Under Multiunit Bargainingopaque Selling Contracting Strategy Under Multiunit Bargaining

Opaque selling is one of the most recent applications of the online-to-offline (O2O) model in the travel industry, such as Priceline.com and Hotwire.com, attracting significant academic and practical attention. Opaque selling enables firms to offer a new channel to potential consumers for increasing supply flexibility and allowing finer segmentation of the consumer base. The opaque literature has usually ignored the trade negotiation between service providers and intermediaries (by empolying the Stackelberg framework). This study uses a bargaining model to analyze whether service providers should collaborate with a common intermediary to introduce an opaque channel using a posted-price mechanism to sell opaque products. Our essential question yet to be answered is whether collaborating with the intermediary is always beneficial to the service providers in the existence of market competition. In other words, does collaboration between the intermediary and the service providers invariably result in a win-win consequence? To solve this problem, we employ a multiunit bilateral bargaining game to analyze competing service providers' collaboration strategies. We study two collaboration models: the monopoly mode, in which a monopoly service provider may collaborate with an intermediary, and the competing mode, in which two competing service providers collaborate with a common intermediary. We analyze the impacts of the consumers' preferences and the bargaining power on the profits of the service providers in the collaboration models and find that under some scenarios, a win-lose consequence may exist in which the intermediary wins and the service providers lose