Pricing Decision under Dual-Channel Structure considering Fairness and Free-Riding Behavior

Under dual-channel structure, the free-riding behavior based on different service levels between online channel and offline channel cannot be avoided, which would lead to channel unfairness. This study implies that the dual-channel supply chain is built up by online channel controlled by manufacturer and traditional channel controlled by retailer, respectively. Under this channel structure, we rebuild the linear demand function considering free-riding behavior and modify the pricing model based on channel fairness. Then the influences of fair factor and free-riding behavior on manufacturer and retailer pricing and performance are discussed. Finally, we propose some numerical analysis to provide some valuable recommendations for manufacturer and retailer improving channel management performance

Coordination mechanism of dual-channel supply chains considering retailer innovation inputs

In response to the online channels established by manufacturers, physical retailers are starting to offer innovative services, which will intensify conflicts between manufacturers and retailers. Considering that the conflict will affect the operation efficiency and sustainable development of the supply chain, the coordination mechanism of a dual-channel supply chain has been established. In this study, we construct the Stackelberg game model based on consumer utility theory to analyze the complex mechanism of retailers' innovation input level affecting supply chain operation and design the double coordination mechanism. The results show that: (1) an optimal combination of wholesale prices, retail prices and innovation input levels can optimize the operational efficiency of the supply chain, (2) Noncooperation among channel members affects the retailer's product pricing, decreases the market share of the physical channel and increases the market demand of manufacturers, (3) The dual coordination mechanism can alleviate channel conflicts, which can improve the operational efficiency of the supply chain. This study provides several insights on the theory of organizational coordination and sustainable development in conflicts of dual-channel supply chains

Supply Chain Coordination Under Sales Effort Free Riding

We study a supply chain with one manufacturer and two retail channels, where an online retailer offers a lower price and free-rides a brick-and-mortar retailer's sales effort. The free riding effect reduces brick-and-mortar retailer's desired effort level, and thus hurts the manufacturer's profit and the overall supply chain performance. To coordinate the efforts, we design and compare several supply chain contracts: a selective rebate contract with price match, a revenue sharing contract with price match, and a target rebate contract with price match, as well as a wholesale price contract with price match. We study the contract performance under both deterministic and stochastic demands. Under deterministic demand, the analysis goes with two cases: the online channel is owned by or independent of the manufacturer.We show that the selective rebate contract coordinates the supply chain in both cases. It can also allocate the system profit arbitrarily between the supply chain players. Furthermore, in the case that the manufacturer owns the online channel, there exists a solution regime on the Pareto-optimal frontier in which both the manufacturer and the brick-and-mortar retailer are better off from the baseline case. We also show that the manufacturer's optimal rebate only depends on the manufacturer's marginal profit and the consumers' sales effort sensitivities. The optimal rebate is independent of the market size and retail prices. In addition, we show that the revenue sharing contract with price match is equivalent to the selective rebate contract. Under stochastic demand, we show that the selective rebate contract outperforms all other contracts by improving supply chain efficiency.Industrial Engineering & Managemen

Applications of Repeated Games in Wireless Networks: A Survey

A repeated game is an effective tool to model interactions and conflicts for players aiming to achieve their objectives in a long-term basis. Contrary to static noncooperative games that model an interaction among players in only one period, in repeated games, interactions of players repeat for multiple periods; and thus the players become aware of other players' past behaviors and their future benefits, and will adapt their behavior accordingly. In wireless networks, conflicts among wireless nodes can lead to selfish behaviors, resulting in poor network performances and detrimental individual payoffs. In this paper, we survey the applications of repeated games in different wireless networks. The main goal is to demonstrate the use of repeated games to encourage wireless nodes to cooperate, thereby improving network performances and avoiding network disruption due to selfish behaviors. Furthermore, various problems in wireless networks and variations of repeated game models together with the corresponding solutions are discussed in this survey. Finally, we outline some open issues and future research directions.Comment: 32 pages, 15 figures, 5 tables, 168 reference

Should offline retailers expand online under consumer showrooming based on the effects of intershowrooming and intrashowrooming?

This study aims to find a way to alleviate or eliminate the negative impact of showrooming on brick-and-mortar retailers. Therefore, under careful consideration of the effects of intershowrooming and intrashowrooming, this study explores whether retailers can effectively solve the negative impact of showrooming by opening online channels. Conduct a comparative study on the decision-making of dual/multi-channel supply chain members before and after the retailer opens an online channel and analyze the influence. In addition, we also explored the impact of factors such as the market scale expansion effect and internet market power structure. Research has found that regardless of the market scale expansion effect generated, it is effective for the retailer to increase profits by opening an online channel. The impact of market scale expansion is not entirely beneficial to the retailer. Under the intrashowrooming, the effect of market scale expansion may benefit the manufacturer. But what is more noteworthy is that for the manufacturer, the impact of intrashowrooming is not necessarily the greater, the better, and the manufacturer's profit may decrease as this effect increases

Strategic integration decision under supply chain competition in the presence of online channel

This study explores the pricing decisions of substitutable products for two competing supply chains in the presence of an online channel. Each supply chain consisting of a single manufacturer and an exclusive retailer and one of the manufacturers distributes products through the online channel. We examine optimal decisions under five scenarios to explore how the strategic cooperation between two manufacturers at the upstream horizontal level or with the retailer at the vertical level affects product pricing decisions and the performance of two supply chains? The results reveal that decisions for cooperation with competing manufacturers and opening an online channel are correlated. In the absence of an online channel, cooperation with their respective retailer can lead to a higher supply chain profit. However, if a manufacturer opens an online channel, then cooperation with competing manufacturers can lead to a higher supply chain profit. Under the vertical integration, total supply chain profit might be lower compared to a scenario where members in each supply chain remain independent. Consumers also need to pay more for products

Economic Perspective Of Omnichannel: A Preliminary Analysis

Recent advancements in technology have not only transformed how people lead their lives, but also how they shop. Traditional single or multichannel retailing models fall short of meeting the changing customer behaviours and expectations. Many in the retailing industry believe that evolving towards seamless omnichannel model is the only way forward for the retailers. However, merely ‘going omnichannel’ does not guarantee success. Lack of understanding of its underlying economic rationale might render a retailer unsuccessful in the face of intense competition and a heightened need for operational efficiencies. The omnichannel strategy might even prove to be unsustainable in certain contexts. We make an attempt to explore the determinants of an omnichannel retailer’s success in a competitive retail environment. Given a market currently served by traditional retailers, our analysis tries to figure out the market share an omnichannel aspirant can expect to acquire and its dependence on the price that it needs to charge for providing the additional set of services through omnichannel

Cost-sharing contract design in a low-carbon service supply chain

This paper investigates a service supply chain (SC) consisting of a service provider (SP) who is in charge of carbon emission reduction and service, and a service integrator (SI) who is responsible for low-carbon advertising, considering corporate social responsibility (CSR). Given that SP shares SI’s advertising cost, SI may have three types of cost sharing decisions, namely, not sharing any cost of SP (contract PA), sharing SP’s emission reduction cost (contract PAIE), or sharing SP’s service cost (contract PAIS). We establish three differential game models to explore the optimal decisions, and identify the conditions under which SP and SI would provide positive participation rates. Our findings demonstrate that consumers’ low-carbon preference, and chain members’ marginal profits and CSR behaviors significantly influence the optimal solutions. Furthermore, we indicate that two-way contracts (contracts PAIE and PAIS) could benefit the entire service SC and its members. Specifically, SI prefers contract PAIE when SP’s service cost efficiency is lower, whereas he would rather choose contract PAIS under a higher one. More importantly, contracts PAIS and PAIE would be the potential equilibrium contract when SI has a relatively high marginal profit. When it is sufficiently low, contracts PAIE and PA would be the possible equilibrium contract