Abstract
We consider price competition with a linear demand function and compare two cases. In the first case each distribution channel is vertically integrated, while in the second, decentralised, case the manufacturers and retailers act independently. We explore the effect of varying the level of price competition on the profits of the industry participants and demonstrate the important role played by the spread of underlying market shares. The coefficient of variation of these market shares determines whether decentralised supply chains can outperform integrated supply chains with an appropriate level of competition.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
