Strategy Analysis of Selling Model Selection in Vertical Competition Supply Chains: A Game Theoretic Model

Qian Chen, Sen Liu, Lijun Wang, Zhe Zhang and Xiaojun He

Mathematical Problems in Engineering, 2021, vol. 2021, 1-14

Abstract:

This paper takes the supply chain perspective to study the choice of selling model for manufacturers and e-tailers. To accomplish our objective, we consider three selling models, including reselling, agency selling, and mixed selling. By comparing and analyzing the equilibrium outcomes of the three selling models, we obtain some beneficial results. These results show that manufacturers and e-tailers cannot manage to make a profit at the same time whether they choose the reselling model or agency selling model. Our results also show that the mixed selling model may improve supply chain performance, as long as the cross-price elasticity is not low. Especially when the cross-price elasticity is comparatively high, a manufacturer and an e-tailer in vertical competition can achieve a profit-Pareto-improving situation, regardless of the market share of the e-tailer.

Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnlmpe:3140493

DOI: 10.1155/2021/3140493

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