Research on E-commerce Price War——Based on Game Theory

E-commerce plays a more and more important role in today's business. This article studies the price-war between Jindong, Suning and Guomei on August 8th, 2012. According to the analysis, competitive inclination to lower the price is the internal cause of the price war. In addition, there are some external causes，including: E-commerce is in the growth period of industrial life cycle, the consumer switching cost is low，control of the supply chain is in the hands of distributors, E-commerce price-searching cost is low, and there is the inevitable conflicts for capturing markets between the new entrants and first-movers. E-commerce price war has certain hazards to all aspects of the supply chain. Whether based on social welfare maximization perspective or company's profit maximization perspective, there is an urgent need of speculations for price competition in E-commerce.