Parallel importation and price competition in a duopoly supply chain

Hassan Shavandi, Siavash Valizadeh Khaki and Majid Khedmati

International Journal of Production Research, 2015, vol. 53, issue 10, 3104-3119

Abstract: Nowadays, diversion of products distribution from authorised channels to the gray markets is one of the main challenges of manufacturers. Suppose an international supplier distributes the products in several countries with different prices. In parallel importation, there are unauthorised distributers who supply products with a lower price and import them to a higher price market. The problem of parallel importation considering a manufacturer and a competitor is analysed using the game theory approach in this article. We investigate the pricing strategy for manufacturers and the effect of unauthorised distributer on price, market share and profit. We also investigate the performance of different policies in a numerical study and show managerial insights.

Date: 2015
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Citations: View citations in EconPapers (7)

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DOI: 10.1080/00207543.2014.974841

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