scholarly journals Should a supplier engage in the marketplace? an equilibrium analysis in a hybrid-format supply chain

2021 ◽  
Vol 55 (5) ◽  
pp. 2639-2655
Author(s):  
You Zhao ◽  
Rui Hou
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Equilibrium Analysis ◽  
Theoretic Model ◽  
Basic Model ◽  
Online Marketplace ◽  
Online Marketplaces ◽  
Hybrid Format ◽  
Game Theoretic ◽  
The Impact

Recently, e-commerce platforms have been acting as both a reseller and a marketplace to serve consumers. This study considers a hybrid-format supply chain that consists of a supplier who sells a product through an intermediary by a wholesale price contract. In addition, the supplier can decide whether to accept the intermediary’s offer to engage in the marketplace (if the supplier accepts, then the agency fee should be paid to the intermediary). We develop a game-theoretic model to investigate the impact of supplier encroachment on the supply chain members. Then, we extend our basic model to check the robustness of our main results. Our results show that the supplier prefers to engage in the marketplace if the agency fee is low and the order fulfillment cost is relatively low, the intermediary benefits from the supplier encroachment if the agency fee is relatively low, and consumers always benefit from encroachment. Interestingly, we show that an increase in channel substitutability leads to raising the supplier’s willingness to adopt an encroachment strategy. Our findings contribute to the online marketplace literature by providing valuable insights into the operation management of online marketplaces.

Equilibrium Analysis of Dual-Channel Supply Chain Under Retailer's Greening Cost Information Asymmetry

2020 ◽  
Vol 13 (4) ◽  
pp. 1-22
Author(s):  
Rofin T. M. ◽  
Biswajit Mahanty
Keyword(s):  
Supply Chain ◽  
Information Asymmetry ◽  
Complete Information ◽  
Equilibrium Analysis ◽  
Theoretic Model ◽  
Cost Information ◽  
Dual Channel ◽  
Game Theoretic ◽  
Dual Channel Supply Chain ◽  
The Impact

The purpose of this study is to investigate the impact of information asymmetry of retailer's greening cost on the performance of both the manufacturer and the retailer. The study considers a dual-channel supply chain comprising of a manufacturer and a retailer committed to green operations. The authors have employed sequential game theoretic model to derive the closed form expressions corresponding to the two cases under consideration, that is: (1) complete information and (2) asymmetric information. They have found that the sharing of greening cost information by the retailer can make both the manufacturer and the retailer better off in terms of profit. They have also found that the greening cost information sharing is all the more important when the greening cost efficiency is weak. The study helps retail managers to make a decision on whether to conceal or reveal the greening cost information with the upstream manufacturer.

Sharing Manufacturer’s Demand Information in a Supply Chain with Price and Service Effort Competition

2021 ◽  
Author(s):  
Yunjie Wang ◽  
Albert Y. Ha ◽  
Shilu Tong
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Problem Definition ◽  
Theoretic Model ◽  
Price Distortion ◽  
Demand Information ◽  
Private Demand ◽  
The Cost ◽  
The Impact ◽  
Share Information

Problem definition: This paper investigates the issue of sharing the private demand information of a manufacturer that sells a product to retailers competing on prices and service efforts. Academic/practical relevance: In the existing literature, which ignores service effort competition, it is known that demand signaling induces an informed manufacturer to distort the wholesale price downward, which benefits the retailers, and so, they do not have any incentive to receive the manufacturer’s private information. In practice, many manufacturers share demand information with their retailers that compete on prices and service efforts (e.g., demand-enhancing retail activities), a setting that has not received much attention from the literature. Methodology: We develop a game-theoretic model with one manufacturer selling to two competing retailers and solve for the equilibrium of the game. Results: We show how an informed manufacturer may distort the wholesale price upward or downward to signal demand information to the retailers, depending on the cost of service effort, the intensity of effort competition, and the number of uninformed retailers. We fully characterize the impact of such wholesale price distortion on the firms’ incentive to share information and derive the conditions under which the manufacturer shares information with none, one, or both of the retailers. We derive conditions under which a higher cost of service effort makes the retailers or the manufacturer better off. Managerial implications: Our results provide novel insights about how service effort competition impacts the incentives for firms in a supply chain to share a manufacturer’s private demand information. For instance, when the cost of effort is high or service effort competition is intense, a manufacturer should share information with none or some, but not all, of the retailers.

Impact of pricing structure on supply chain coordination with cooperative advertising

2020 ◽  
Vol 54 (6) ◽  
pp. 1613-1629
Author(s):  
Seyed Jafar Sadjadi ◽  
Amin Alirezaee
Keyword(s):  
Supply Chain ◽  
Supply Chain Coordination ◽  
Optimal Decision ◽  
Theoretic Model ◽  
Cooperative Advertising ◽  
Decision Variables ◽  
Retail Prices ◽  
Potential Demand ◽  
Game Theoretic ◽  
The Impact

This paper develops a game-theoretic model in a two-echelon supply chain composed of one manufacturer and two retailers to study the effect of pricing structure and cooperative-advertising decisions on the supply chain coordination performance. In the proposed model, different pricing structures are analyzed and then, two types of pricing structure in supply chain coordination mechanisms are presented, in addition to considering four possible scenarios for pricing structure. For the first two scenarios, retailers determine the retail prices, while in the other two ones, the sales price is set by the manufacturer. Therefore, the retailers are obliged to comply with this rule. The manufacturer-Stackelberg and the cooperative games are formulated for each scenario by considering key assumptions associated with advertising expenditures to maintain the potential demand size. This paper also presents some analytical results and determines the equilibrium of the models for each scenario. Finally, a numerical analysis is conducted to illustrate the impact of pricing structure on the optimal decision variables and the profit of the supply chain members.

scholarly journals Dynamic Adjustment Mechanism and Differential Game Model Construction of Mask Emergency Supply Chain Cooperation Based on COVID-19 Outbreak

2021 ◽  
Vol 13 (3) ◽  
pp. 1115
Author(s):  
Shufan Zhu ◽  
Kefan Xie ◽  
Ping Gui
Keyword(s):  
Supply Chain ◽  
Differential Game ◽  
Production Technology ◽  
Wholesale Price ◽  
Transfer Payment ◽  
Dynamic Adjustment ◽  
Supply Chain System ◽  
Government Subsidies ◽  
Technology Investment ◽  
The Impact

Incorporating the impact of the COVID-19 pandemic on the mask supply chain into our framework and taking mask output as a state variable, our study introduces the differential game to study the long-term dynamic cooperation of a two-echelon supply chain composed of the supplier and the manufacturer under government subsidies. The study elaborates that government subsidies can provide more effective incentives for supply chain members to cooperate in the production of masks compared with the situation of no government subsidies. A relatively low wholesale price can effectively increase the profits of supply chain members and the supply chain system. The joint contract of two-way cost-sharing contract and transfer payment contract can promote production technology investment efforts of the supply chain members, the optimum trajectory of mask production, and total profit to reach the best state as the centralized decision scenario within a certain range. Meanwhile, it is determined that the profits of supply chain members in the joint contract can be Pareto improvement compared with decentralized decision scenario. With the increase of production technology investment cost coefficients and output self-decay rate, mask outputs have shown a downward trend in the joint contract decision model. On the contrary, mask outputs would rise with growing sensitivity of mask output to production technology investment effort and increasing sensitivity of mask demand to mask output.

Augmenting Employees’ Efforts in Innovation

2021 ◽  
pp. 097674792198917
Author(s):  
Nikita Jain
Keyword(s):  
Theoretic Model ◽  
Wrongful Discharge ◽  
Equilibrium Level ◽  
Game Theoretic ◽  
Game Theoretic Model ◽  
The Impact

Strong labour laws play a major role in motivating innovation among employees. It has been found in the literature that stringency of labour laws is positively linked with employees’ efforts in innovation, in particular, wrongful discharge laws (WDL). However, employees may also bring nuisance suits against employers. Usually, the result of these suits is that both parties settle with each other. Thus, even if employees are justly dismissed, they may be able to bring nuisance suits against employers and gain a settlement amount. This article investigates how the possibility of nuisance suits affects the impact of WDL on employees’ efforts in innovation. In this respect, a game-theoretic model is developed in the article to find the equilibrium level of employees’ efforts in the presence of nuisance suits, where there is a possibility of employees getting discharged from the firm. I find that if nuisance suits are a possibility, the stringency of WDL has no impact on employees’ efforts if defence cost of the firm is low; but for higher defence costs, WDL affects employees’ efforts. The efforts exerted by an employee are found to be weakly increasing in the defence costs of the firm.

Implications of Price Matching in Supply Chain Negotiation

2021 ◽  
Author(s):  
Weixin Shang ◽  
Gangshu (George) Cai
Keyword(s):  
Supply Chain ◽  
Social Welfare ◽  
Wholesale Price ◽  
Consumer Welfare ◽  
Problem Definition ◽  
Nash Bargaining ◽  
Price Matching ◽  
The Impact ◽  
Multiple Buyers ◽  
Wholesale Pricing

Problem definition: Few papers have explored the impact of price matching negotiation (PM), in which a channel matches its price with the resulting wholesale price bargained by another channel, on firms’ performances, consumer welfare, and social welfare, with and without supply chain coordination. Academic/practical relevance: Negotiation has been widely seen in determining both uniform and discriminatory wholesale prices, which affect outcomes of competitive supply chain practices. Methodology: To characterize the PM mechanism, we use game theory and Nash bargaining theory to compare PM with simultaneous negotiation (SN) through a common-seller two-buyer differentiated Bertrand competition model. Results: Our analysis reveals that PM can benefit the seller but hurt all buyers, which is at odds with some fair wholesale pricing clauses intending to protect buyers. Under coordination with side payments, however, all firms can conditionally benefit more from PM than from SN. Despite firms’ gains, PM leads to less consumer utility and social welfare compared with SN, unless the second buyer in PM is considerably less powerful than the first buyer. Coordination further worsens PM’s negative impact on consumer utility and social welfare. Moreover, the existence of a spot market can increase the wholesale price in PM, hurting buyers, consumers, and society. Furthermore, the qualitative results about PM remain robust under an alternative disagreement point for PM, multiple buyers, and other extensions. Managerial implications: This paper delivers insights on when price matching in supply chain wholesale price negotiation can benefit a seller, buyers, consumers, and society in a variety of scenarios. It advocates how managers can use PM to their own advantages and provides rationale to decision makers for policy regulations regarding wholesale pricing.

Contracts and Information Structure in a Supply Chain with Operations and Marketing Interaction

2016 ◽  
Vol 18 (04) ◽  
pp. 1650014 ◽  
Author(s):  
Fouad El Ouardighi ◽  
Gary Erickson ◽  
Dieter Grass ◽  
Steffen Jørgensen
Keyword(s):  
Supply Chain ◽  
Information Structure ◽  
Wholesale Price ◽  
Revenue Sharing ◽  
Open Loop ◽  
The State ◽  
Current State ◽  
Marketing Activities ◽  
Purchase Rate ◽  
The Impact

The objective of the paper is to study how wholesale price and revenue sharing contracts affect operations and marketing decisions in a supply chain under different dynamic informational structures. We suggest a differential game model of a supply chain consisting of a manufacturer and a single retailer that agree on the contract parameters at the outset of the game. The model includes key operational and marketing activities related to a single product in the supply chain. The manufacturer sets a production rate and the rate of advertising efforts while the retailer chooses a purchase rate and the consumer price. The state of the game is summarized in the firms’ backlogs and the manufacturer’s advertising goodwill. Depending on whether the supply chain members have and share state information, they may either make decisions contingent on the current state of the game (feedback Nash strategy), or precommit to a plan of action during the whole game (open-loop Nash strategy). Given a contract type, the impact of the availability of information regarding the state of the game on the firms’ decisions and payoffs is investigated. It is shown that double marginalization can be better mitigated if the supply chain members adopt a contingent strategy under a wholesale price contract and a commitment strategy under a revenue sharing contract.

Manufacturer’s Leasing Channel Management in a Car Supply Chain

2020 ◽  
Vol 37 (06) ◽  
pp. 2050026
Author(s):  
Lihong Cheng ◽  
Xiaolong Guo ◽  
Bo Wang
Keyword(s):  
Production Cost ◽  
Theoretic Model ◽  
Consumer Experience ◽  
Interesting Phenomenon ◽  
Pricing Policy ◽  
Game Theoretic ◽  
Leasing Company ◽  
The Impact ◽  
Centralization And Decentralization ◽  
Main Model

Thanks to the convenient and hassle-free manner of leasing service, the car leasing industry has flourished in recent years. To leverage commercial opportunities, many well-known car manufacturers have chosen to enter the leasing market rather than focus solely on the selling market. An interesting phenomenon is that some manufacturers establish their own leasing departments to gain revenue from the leasing market (referred to as centralization), while other manufacturers conduct their leasing businesses through an autonomous leasing company (referred to as decentralization). In this paper, we propose a game-theoretic model to explore whether a car manufacturer should manage a leasing department in a centralized channel or have the leasing business done by an autonomous company in a decentralized channel. We demonstrate the optimal pricing policy for the manufacturer, dealer, and leasing department/company under both centralization and decentralization. In the main model, we assume that the consumer experience value preference follows a uniform distribution, and leasing brings consumers a better experience value than purchasing, and we normalize the marginal production cost of the product to zero. Our analysis reveals that neither centralization nor decentralization is always optimal, and the related boundary is analyzed. An interesting finding is that as the consumers’ leasing experience value rises, the dealer obtains higher profit, even though it serves fewer consumers in the decentralized channel. In the extension, we relax our assumptions to examine the impact of a normal distribution of consumer experience value preferences, a large purchasing experience value, and a non-negligible production cost, and we find that most of the main model results still hold qualitatively.

scholarly journals A Two-Echelon Agricultural Product Supply Chain with Freshness and Greenness Concerns: A Cost-Sharing Contract Perspective

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-13
Author(s):  
Manyi Tan ◽  
Manli Tu ◽  
Bin Wang ◽  
Tianyue Zou ◽  
Hong Cheng
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Agricultural Products ◽  
Sensitivity Analyses ◽  
Agricultural Product ◽  
Human Beings ◽  
Optimal Decisions ◽  
Game Theoretic ◽  
The Cost ◽  
The Impact

Agricultural products are basic needs of human beings, and whether they are cultivated in a green (or organic) manner has direct impact on environment and public health. This research incorporates product freshness and greenness into a two-echelon agricultural product supply chain (APSC). Game theoretic analyses are carried out to examine pricing, freshness, and greenness decisions of the supply chain members with and without cost-sharing for greenness investment. Subsequently, we conduct comparative and sensitivity analyses for these optimal decisions and profits of the APSC members under different cases. Numerical experiment is employed to investigate the impact of key parameters on equilibrium decisions and profitability. Analytical and experimental results show that the cost-sharing contract of greenness investment for agricultural products helps to strengthen the supply chain members’ effort in improving the greenness and freshness levels of the agricultural product, thereby enhancing both individual and channel profitability of the APSC under certain conditions. This research also reveals a widened profit gap between the producer and the retailer under the cost-sharing contract.

scholarly journals Research on the Dynamics Game Model in a Green Supply Chain: Government Subsidy Strategies under the Retailer’s Selling Effort Level

Complexity ◽  
2020 ◽  
Vol 2020 ◽  
pp. 1-15 ◽  
Author(s):  
Xigang Yuan ◽  
Xiaoqing Zhang ◽  
Dalin Zhang
Keyword(s):  
Supply Chain ◽  
Wholesale Price ◽  
Dynamic Game ◽  
Retail Price ◽  
Green Supply Chain ◽  
Government Subsidy ◽  
Principal Agent Theory ◽  
Effort Level ◽  
The Impact ◽  
Selling Effort

Based on dynamic game theory and the principal-agent theory, this paper examined different government subsidy strategies in green supply chain management. Assuming that the retailer’s level of selling effort involved asymmetric information, this study analyzed the impact of different government subsidy strategies on the wholesale price, the product greenness level, retail price, the level of selling effort, the manufacturer’s profit, and the retailer’s profit. The results showed that (1) the government’s subsidy strategy can effectively not only improve the product greenness level but also increase the profits of an enterprise in a green supply chain, which helps the retailer to enhance their selling effort; (2) regardless of whether the retailer’s level of selling effort was high or low, as the government’s subsidy coefficient increased, the wholesale price continued to decrease, and the product greenness level and retailer’s selling effort level also increased.

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