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Parallel importation in a supply Chain: The impact of gray market structure

Hai Li, Jing Shao and Stuart X. Zhu

Transportation Research Part E: Logistics and Transportation Review, 2018, vol. 114, issue C, 220-241

Abstract: With the rapid development of global economic integration, the size of gray markets continues to expand. The purpose of this paper is to analyse the impact of different structures of gray markets on supply chain decisions and profits. Using game theory, we comprehensively analyze pricing and quantity decisions under monopoly parallel importation (either third-party parallel importation or retailer parallel importation), and duopoly parallel importation, including three different structures in which the retailer and the third-party parallel importation coexist in gray markets with different power structures. We obtain equilibrium results for each structure, compare the optimal strategies of these structures, and develop valuable insights.

Keywords: Parallel importation; Power structure; Gray market; Competition; Game theory (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:114:y:2018:i:c:p:220-241

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DOI: 10.1016/j.tre.2018.04.006

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