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Effective allocation of financial services intensity and its impact on channel competition
Author(s) -
Wang Zongrun,
Yang Mei
Publication year - 2020
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.3196
Subject(s) - profitability index , competition (biology) , purchasing , business , channel (broadcasting) , financial services , economic surplus , finance , industrial organization , microeconomics , monetary economics , economics , marketing , market economy , telecommunications , welfare , ecology , computer science , biology
We study the role of adjusting the sales intensity of financial advisers in determining investors' choice of purchasing channels and explore how banks take advantage of the “aspirations” deviation of investors to formulate the optimal strategy for making recommendations. Our research shows that the flexible allocation of financial services increases the profits of banks, but investors' surplus is often completely deprived. Interestingly, in online and offline channel competition, improving platform competitiveness may lead to increased, rather than decreased, profitability for banks. Moreover, with completely heterogeneous investors, strategic outcomes can be significantly different under the perception coefficient of different dispersion degree.