We study the multifaceted impact of loan programs initiated by a retail platform to its sellers on these sellers’ operational and financing decisions, profits of the sellers and the platform, as well as consumer welfare. Many small and medium-sized enterprises (SMEs) on retail platforms face capital constraints that limit their ability to meet market demand. Due to lack of sufficient asset and credit history, SMEs also face the challenge of securing loans from traditional banks. Therefore, the financial loan decisions of a retail platform to its SMEs have become an essential part of the platform design. We develop a two-stage game-theoretic model where multiple SMEs who face financial constraints compete on a retail platform, and the platform decides who to offer financial loans and what are the loan credit lines. We show that the competitive landscape on the platform greatly affects the effectiveness of the platform's loan programs. Offering a generous loan to a monopoly seller on the platform benefits all stakeholders. Offering generous loans to competing sellers, however, can make sellers worse-off in the equilibrium where they are willing to accept the loans -- a prisoner's dilemma. The platform can, by strategically setting the loan limit, reduce the intensity of the prisoner's dilemma for sellers in high or moderate need of funds. Two factors -- the platform's required rate of return and referral fee -- affect the platform's willingness-to-lend and the interaction between the platform and the sellers. We also find that offering asymmetric loans to symmetric competing sellers can benefit both the platform and the sellers as a whole. The research findings provide useful implications for retail platforms on how to offer financial loans to sellers based not only on an individual seller's characteristics but also on the competition in the marketplace. From a government perspective, our research also sheds light on the impact of a platform's loan decisions on consumer welfare and how such decisions should be regulated.
任龙，对外经济贸易大学助理教授，于2018年从清华大学经济管理学院取得博士学位，圣路易斯华盛顿大学访问学者。他的研究兴趣包括运营管理、电子商务与优化，以第一或者通讯作者在国际国内主流期刊《Fuzzy Sets & Systems》《International Journal of Production Economics》《中国管理科学》《管理工程学报》等发表论文近十篇，作为主持人承担教育部人文社科青年项目1项，目前担任国际期刊《Decision Sciences》《Electronic Commerce Research and Applications》《IEEE Transactions on Fuzzy sets and Systems》《IEEE Access》《International Journal of Production Economics》等杂志的审稿人，同时也是INFORMS、POMS、SIAM、IEEE协会会员。