Abstract
In recent years, many manufacturers have been selling their products to online consumers through e-tailers by adopting reselling mode and agency selling mode simultaneously. The sales from the online channels inevitably incur spillover effect to the traditional offline channels. This paper develops a dynamic pricing game model on the basis of a long-term gradient adjustment mechanism for a multichannel supply chain that consists of a manufacturer and an e-tailer and focuses on examining the impacts of spillover effect, agency fee, and adjustment speed on the stability and complexity of the dynamic game system. The results show that both a greater spillover effect and a higher agency fee can make the dynamic game system more stable, and a higher adjustment speed can destabilize the dynamic game system through period doubling bifurcation. Furthermore, it is interesting to find that the destabilization of the game system benefits the e-tailer and the supply chain while having little influence on the manufacturer, and thus the dynamic adjustment strategy may improve the supply chain efficiency.
Highlights
E-commerce has witnessed rapid growth in the past decade and has been occupying market share previously dominated by physical stores, making up 10.2% of the global retail sales in 2017 [1]
With the rapid development of e-commerce, upstream manufacturers often cooperate with e-tailers to sell their products in two online modes in addition to the traditional offline channel, and the multichannel supply chain structure is a common setting in practice. e introduction of multi-online channels is inevitably accompanied by spillover effect; that is, the sales in the offline channel are affected by the sales in the online channels. e spillover effect which can stimulate offline demand or decrease offline demand will significantly affect pricing strategies in the supply chain. is paper incorporates the spillover effect from online to offline sales into the pricing game in a multichannel supply chain
In this study, combined with the spillover effect, we mainly focus on a dynamic repeated game process for the decision makers with bounded rationality, which is different from the existing researches with the assumption of fully rational players
Summary
E-commerce has witnessed rapid growth in the past decade and has been occupying market share previously dominated by physical stores, making up 10.2% of the global retail sales in 2017 [1]. Different from the above existing literatures, our paper focuses on the dynamic repeated pricing game in a multichannel supply chain, especially on the impact of spillover effect from online to offline on the complexity and dynamics of the game system. We develop a dynamic pricing model for a multichannel supply chain where a manufacturer sells through the traditional offline stores and e-tailers’ online channels in both the reselling mode and the agency selling mode under a static one-shot game and a dynamic repeated game, respectively. Our work extends the existing literatures considering the impacts of spillover effect and dealing with reselling and agency selling in a platform-based retailing market with rational decisions to the case of decision-making under bounded rationality, where the supply chain members cannot obtain complete market information which prevents them from making perfect decisions.
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