An Application of a Game-Theory Model Considering Loyal Customers and the Role of Rating Variances in Ebusiness Decision-Making Process

This study investigates how variance and average rating as a combination factor play different roles in the decision-making process by constructing a game-theory model. Re-sults show that a higher variance is incorporated with low quality in frequently-purchased products and unreli-able quality in infrequently-purchased products when average product ratings are high. A higher variance has a stronger influence on consumer demand for frequently-purchased products than on infrequently-purchased products when both products receive similarly high average rat-ings. There is a counter-effect when both products receive similarly low average ratings. The study demonstrates how consumers are keen to make a risky purchase decision prefer-ring low quality products with a higher variance when making decision on two products that are substitutes for each other with the same average rating. This study will assist managers in developing marketing communication strategies to reduce pre-purchase buyers’ feelings of uncertainty. © 2022, Tamkang University. All rights reserved.