E-Commerce Supply Chain Models under Altruistic Preference

Yuyan Wang, Zhaoqing Yu, Liang Shen and Wenquan Dong
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Yuyan Wang: School of Business, Shandong Normal University, Jinan 250014, China
Zhaoqing Yu: School of Management Science and Engineering, Shandong University of Finance and Economics, Jinan 250014, China
Liang Shen: School of Public Finance and Taxation, Shandong University of Finance and Economics, Jinan 250014, China
Wenquan Dong: Department of Industrial and Systems Engineering, The University of Tennessee, Knoxville, TN 37996, USA

Mathematics, 2021, vol. 9, issue 6, 1-19

Abstract: This paper reviews the decisions, coordination contract, and altruistic preference of an e-commerce supply chain (eSC) composed of a manufacturer and a third-party e-commerce platform (platform). The research derives optimal decisions in a decentralized model with altruistic preference; it is indicated that altruistic preference can help increase the sales price and sales service level. Although the platform’s altruistic preference is not beneficial to its own profits, it can help increase the manufacturer’s profits. Moreover, when the degree of altruistic preference is kept within a limit, the profit of the decentralized system is higher in a model with altruistic preferences, which indicates that altruistic preference can contribute toward maintaining a friendly, harmonious, and cooperative a relationship between the platform and manufacturers. Contrary to a traditional offline supply chain, where the sales price is the lowest in the centralized model, the sales price is highest in a centralized eSC model. In the proposed coordination contract, the platform with a certain degree of altruistic preference offers zero-commission sales service and charges a certain amount for a fixed professional service fee. The proposed contract is more applicable to products whose market demands are less affected by sales prices and more affected by the sales service level.

Keywords: e-commerce supply chain; altruistic preference; coordination; game theory (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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