Price competition in a duopoly common retailer channel

Choi, Sungchul

doi:10.1016/s0022-4359(96)90010-x

Cited by 327 publications

(165 citation statements)

References 11 publications

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“…Linear demand functions of retail prices are used to characterize market demand because linear demand functions are tractable and commonly adopted in the literature on supply chain analysis [16,18,[20][21][22][23]. We assume that the market demand 0 for product 1, sold through manufacturer 1's online channel, is given as…”

Section: Problem Descriptionmentioning

confidence: 99%

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Interactions of Bargaining Power and Introduction of Online Channel in Two Competing Supply Chains

Wei

Shao

Zhao

2018

Mathematical Problems in Engineering

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This paper studies the effect of dual-channel format on supply chain's competition ability and the effect of different bargaining powers on the competition between two supply chains and the optimal pricing decisions of all supply chain members when one supply chain introduces an online retailing channel. We develop four game models and obtain the optimal pricing decisions in closed form of these models and give some sensitivity analysis through numerical approach. Some new managerial insights are obtained as follows: Regardless of the two supply chain members' bargaining forms, the optimal price, the maximal demand, and the maximal profit decrease as the self-price sensitivity decreases. The industry holds advantage in getting higher profit when the supply chain without online retailing channel is led by the retailer. In addition, we find that a manufacturer as a leader of its supply chain can get more profit when the competing supply chain's leader is the manufacturer than when the competing supply chain's leader is the retailer.

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Section: Problem Descriptionmentioning

confidence: 99%

“…Given earlier decisions 2 , 1 , and 0 made by retailer 2 and manufacturer 1, respectively, we can have the first-order derivative of 1 to 1 and the firstorder derivative of 2 to 2 as shown in (C.1) and (C.9). Therefore, by setting (C.1) and (C.9) to zero and solving them simultaneously, we obtain (21).…”

Section: Proofs Of Propositionsmentioning

confidence: 99%

Interactions of Bargaining Power and Introduction of Online Channel in Two Competing Supply Chains

Wei

Shao

Zhao

2018

Mathematical Problems in Engineering

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“…In a seminal paper on channel power structures, Choi [10] demonstrates the differences among three game settings (two Stackelberg games and a vertical Nash) of a duopoly common retailer channel model. Ertek and Griffin [11] developed MS and RS games to discuss the impact of the power structures in a two-stage supply chain.…”

Section: Rq1mentioning

confidence: 99%

Low Carbon Strategy Analysis of Competing Supply Chains with Different Power Structures

Liu

Tsai

2017

Sustainability

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This paper investigates the emission reduction performance for supply chain members in both single-channel and exclusive dual-channel cases. Two game scenarios (Manufacturer Stackelberg and Retailer Stackelberg) are examined under different channel structures. Furthermore, we introduce government subsidies as an impact factor of low-carbon strategy adoption. In the single-channel (Case 1), we mainly examine the influence of consumers' price-sensitivity on channel members' optimal decisions. In the dual-channel (Case 2), we focus on the joint impact of product substitutability and different channel power structures on the optimal decisions under asymmetric related channel status. The analysis suggests that the Stackelberg leaders always perform better than their corresponding followers before emission reduction, while they may not necessarily yield more benefits after emission reduction. The implementation of low-carbon strategy depends on parameters like product substitutability and channel base demand. Finally, all the supply chain members will encounter a Prisoner's Dilemma when the product substitutability is relatively high.

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“…Our analysis of bottlenecks can be extended along the framework proposed in Section 2 by analysing the long-run equilibrium price relationships in more detail, by introducing more variables, such as competitive prices, and by allowing for more than one firm per stage of the marketing channel (see e.g. Choi, 1996, andWohlgenant, 1989, and the references cited therein). All these extensions, however, ask for a further elaboration of demand and cost functions.…”

Section: S Ccmcluslû Nsmentioning

confidence: 99%

A Structural Vector Error-Correction Model of Price Time Series to Detect Bottleneck Stages within a Marketing Channel

Kuiper¹,

Meulenberg

1999

Contributions to Economics

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AppendixIn this appendix we show that the optimal degree of profit sharing in the backward contract is on the interval (0,1]. We do this in two parts. We first show the optimal contractual share to be non-negative. Assume the share is not positive. From expression (14), a* < 0 implies:Rearranging terms, we can express this result as:where the right-hand equality holds by the downstream first-order condition (13).The non-positive profit-share contradicts the optimal price set in the upstage industry, however, as c > PU by expression (12). Therefore, nonpositive market-share contracts contradict, whence the market-share of an upstream producer is positive.We next show the optimal contractual share to be consistent with values less than one. 7.

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Price competition in a duopoly common retailer channel

Cited by 327 publications

References 11 publications

Interactions of Bargaining Power and Introduction of Online Channel in Two Competing Supply Chains

Interactions of Bargaining Power and Introduction of Online Channel in Two Competing Supply Chains

Low Carbon Strategy Analysis of Competing Supply Chains with Different Power Structures

A Structural Vector Error-Correction Model of Price Time Series to Detect Bottleneck Stages within a Marketing Channel

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