On efficiency of multistage channel with bargaining over wholesale prices

Feimin Zhong, Jinxing Xie, Xiaobo Zhao and Zuo‐Jun Max Shen

Naval Research Logistics (NRL), 2016, vol. 63, issue 6, 449-459

Abstract: This article considers a multistage channel with deterministic price‐sensitive demand. Two systems for pricing decisions, that is, the bargaining system and the leader‐follower system, are compared. We characterize the necessary and sufficient conditions on the power structure, under which the solution of the bargaining system Pareto dominates that of the leader‐follower system. Also, under such conditions, we give a tight upper bound of channel efficiency of the bargaining system, which converges to 100% channel efficiency as the number of stages increases to infinity. © 2016 Wiley Periodicals, Inc. Naval Research Logistics 63: 449–459, 2016

Date: 2016
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https://doi.org/10.1002/nav.21713

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Persistent link: https://EconPapers.repec.org/RePEc:wly:navres:v:63:y:2016:i:6:p:449-459

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