This paper evaluates the impact of price discount contracts and pricing schemes on the dual-channel supply chain competition. Channel conflict occurs when the supplier enters the online direct channel. Traditional contracts normally require tedious administrational participation, full information of the cost structures, and other factors. The introduction of simple price discount contracts aims at providing easy implementation and effective coordination results. From supplier Stackelberg, retailer Stackelberg, and Nash game theoretic perspectives, we show that the scenarios with price discount contracts can outperform the non-contract scenarios. In addition, we show consistent pricing scheme can reduce the channel conflict by inducing more profit to the retailer. The leader in the games might, but is not guaranteed to, have advantages.
Article
Game theoretical perspectives on dual-channel supply chain competition with price discounts and pricing schemes
Information Systems and Analytics
Document Type
Article
Publication Date
1-1-2009
Publisher
Elsevier
Disciplines
Abstract
Citation Information
Cai, G. (George), Zhang, Z. G., & Zhang, M. (2009). Game theoretical perspectives on dual-channel supply chain competition with price discounts and pricing schemes. International Journal of Production Economics, 117(1), 80–96. https://doi.org/10.1016/j.ijpe.2008.08.053