It is well-known that point card service and discounting strategy are effective methods for severe retailer competition. However, over-discounting does not have more corporate profits than expected when letting a retailer acquire more customers and, on the contrary, sometimes may lead to bankruptcy. Therefore, it is important to know what kind of point card service and discounting strategy is effective for retailers to survive and increase operating profits. We develop an agent-based simulation model of price competition between retailers using point cards service and discounting strategy to analyze under which conditions the retailer can survive.
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