Authors
Hu Huang, Hua Ke, Lei Wang
Publication date
2016/8/1
Journal
International Journal of Production Economics
Volume
178
Pages
12-21
Publisher
Elsevier
Description
This paper considers a pricing competition and cooperation problem in a two-echelon supply chain with one common manufacturer and duopoly retailers. Six decentralized game models are built to examine how pricing strategies (Bertrand and collusion) and power structures (manufacturer-dominant, retailers-dominant and non-dominant) affect supply chain members' performance. Specifically, without loss of generality, we rewrite our models as systems including only two parameters (retail substitutability and asymmetric parameter which represents the non-price difference between the two retailers) by standardizing prices and quantities. It is found that, regardless of the power structures, the two retailers' collusion behaviors will increase the sales prices and reduce the quantities of the product. The results demonstrate that whether the duopoly retailers benefit from their collusion behaviors depends on the power …
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