Pricing decisions for complementary products with firms’ different market powers

Jie Wei, Jing Zhao and Yongjian Li

European Journal of Operational Research, 2013, vol. 224, issue 3, 507-519

Abstract: This article reports the results of a study that explores the pricing problems with regard to two complementary products in a supply chain with two manufacturers and one common retailer. The authors establish five pricing models under decentralized decision cases, including the MS-Bertrand, MS-Stackelberg, RS-Bertrand, RS-Stackelberg, and NG models, with consideration of different market power structures among channel members. By applying a game-theoretical approach, corresponding analytic solutions are obtained. Then, by comparing the maximum profits and optimal pricing decisions obtained in different decision cases, interesting and valuable managerial insights are established.

Keywords: Pricing; Complementary products; Market power; Stackelberg game (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (30)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ejores:v:224:y:2013:i:3:p:507-519

DOI: 10.1016/j.ejor.2012.09.011

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