Dynamic pricing strategies: Uniform or discrimination for multi-channel retailing under platform-based supply chain competition

Abstract

Most retailers have implemented multi-channel retailing strategies with the development of the platform economy. The existing literature ignores the effects of the complex competition between the strong-brand and weak-brand platform-based supply chains applying multi-channel retailing and consumers’ cross-brand-channel behavior on dynamic pricing (uniform vs. discrimination pricing). This study discusses the pricing dilemma in a more complex competition and fills the gap by modeling a 2*2 dynamic pricing Nash game between two multi-channel retailing supply chains. Our results show that when the competitor chooses uniform or discrimination pricing, the retailers should apply the same pricing strategy as the competitor. In addition, we find that uniform pricing vs. uniform pricing and discrimination pricing vs. discrimination pricing are Nash equilibrium results. Our analysis suggests that the scenario uniform vs. uniform pricing brings the highest profits to both supply chains and the strong-brand retailer but not to the weak-brand retailer.