Price Stickiness in a Dual-Channel Supply Chain

Ismail Saglam

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper, we study price stickiness in a dual-channel supply chain where a single manufacturer sells its product through an online channel and a retailer. We construct a noncooperative game where the manufacturer and the retailer decide on whether or not to costlessly adjust their prices after a demand shock. If the demand shock is positive, then the Nash equilibrium is always unique and non-sticky. If the demand shock is negative, then there exist Nash equilibria where some prices are sticky. Moreover, no Nash equilibrium is always Pareto optimal, pointing to the possibility of the Prisoner's Dilemma.

Keywords: Supply chain; price adjustment; price stickiness. (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 (search for similar items in EconPapers)
Date: 2023-09
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:123409

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