Dynamic analysis of pricing model in a book supply chain

Fengxia Mai, Jianxiong Zhang and Xiaojie Sun

International Journal of Production Economics, 2021, vol. 233, issue C

Abstract: Based on two formats of books − paper book and electronic book, book publishers often sell their products to online consumers through e-tailers by adopting reselling mode and agency selling mode simultaneously. This paper develops a dynamic pricing game model on basis of a long-term gradient adjustment mechanism for a book supply chain that consists of a publisher and an e-tailer, and focuses on the impacts of agency fee rate and adjustment speed on the complexity of the dynamic game. We compare the system stability and the average profits for a dynamic decentralized decision and a dynamic centralized decision. The results show that a higher agency fee rate makes the dynamic system more stable, and a higher adjustment speed makes the dynamic system become more unstable with exhibiting a period doubling bifurcation. Moreover, the dynamic decentralized system is more stable than the dynamic centralized system as the adjustment speed increases. Under the dynamic decentralized decision, the profits of the publisher and the supply chain decrease while the e-tailer's profit increases when the game system loses its stability. In addition, it is interesting to find that in a certain parameter region, the profit of the supply chain under the dynamic decentralized decision is higher than that under the dynamic centralized decision.

Keywords: Book supply chain; Dynamic pricing; Agency selling; Dynamic game; Complexity; Stability (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:233:y:2021:i:c:s0925527321000025

DOI: 10.1016/j.ijpe.2021.108026

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