Pricing Decision in a Dual-Channel System with Heterogeneous Consumers

Feng Li (), Junling Liu () and Ying Wei ()
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Feng Li: South China University of Technology
Junling Liu: South China University of Technology
Ying Wei: Jinan University

A chapter in LISS 2013, 2015, pp 307-314 from Springer

Abstract: Abstract This paper studies the impact of consumer behavior factor on pricing strategy of a dual-channel supply chain system, which consists of a manufacturer and an independent retailer. We describe a manufacturer-leader Stackelberg game scenario. In the market, potential customers make their own purchasing decision according to product price on each channel, their preference for each channel—loyalty, and degree of rationality in decision-making process, etc. To represent behaviors of heterogeneous potential customers in the market, agent-based modeling and simulation is introduced to model each customer. Our numerical results show the manufacturer prefers to regard customer as being perfect rationality. On the other side, the retailer prefers to bargain for that rationality.

Keywords: Pricing; Dual-channel supply chain; Consumer behavior; Agent-based modeling; Bounded rationality; Loyalty; Stackelberg game (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-40660-7_45

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DOI: 10.1007/978-3-642-40660-7_45

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