Optimal Return Freight Insurance Policies in a Competitive Environment

In recent years, return freight insurance (RFI) has emerged as a solution to the problem of returns goods purchased online. However, although RFI reduces costs both parties and increases purchase intention consumers, it also rate retailers’ profits. Therefore, some online retailers have looked at increasing their service effort means improving level reducing returns. Considering impact efforts on consumer returns, choice strategy is very important for its profit. It worth studying how choose policies pricing in different market environments. this study, we examine decision-making process, including influence retail by developing three duopolistic-competition game models based markets. case, analyze compare optimal decisions, profits each market, identify relationship between decisions degree competition. The result shows that under where provided retailer, increase with addition, should consider competition compensation demand when making decision whether offer insurance.