Abstract
With the rapid development of the Internet, many traditional retailers have built their online channels. The fairness concern may play an important role in a dual‐channel supply chain with a multichannel retailer. This paper establishes a Stackelberg game model in which a manufacturer produces and sells products through direct online channel and a retailer sells directly to consumers through online and offline channels. The manufacturer’s fairness concern (advantageous inequity) and the retailer’s fairness concern (disadvantageous inequity) are considered. Four scenarios are investigated: no fairness concern (NF), the retailer fairness concern (RF), the manufacturer fairness concern (MF), and both the manufacturer and the retailer fairness concern (MRF). The theoretical analysis shows that if the manufacturer’s advantageous inequity concern is low, the profit of the whole supply chain in the MRF scenario is the greatest. Otherwise, the supply chain profit in the NF or RF scenario is the greatest. That is, the manufacturer’s and the retailer’s fairness concern may increase the profit of the supply chain. This study also finds that the manufacturer’s advantageous inequity concern can increase the social welfare. The retailer should not concern about fairness if the manufacturer has high fairness concern. Besides, this paper shows that the manufacturer’s selling price cannot be affected by the fairness concern. Adjusting the wholesale price is the only thing that the manufacturer can do to reduce disadvantageous or advantageous inequity. In the RF scenario, the role of the retailer’s disadvantageous inequity concern is to reallocate the supply chain profit. Our findings provide some managerial insights on the pricing decision when the multichannel retailer and the manufacturer consider the fairness.
Highlights
With rapid development of Internet, more and more manufacturers, such as Cisco, IBM, Estee Lauder, and Haier, have begun to sell directly through online channels
As a leading Chinese brick-and-mortar home electronics retailer, Suning launched its official online store in 2010. e appearance of multichannel retailers has a profound impact on the traditional dual-channel supply chain in which a manufacturer sells through online channel and a retailer with physical store. is makes the traditional dual-channel structures more complex than ever
For the supply chain with long-term cooperation, the fairness concern may play an important role in a dual-channel supply chain
Summary
With rapid development of Internet, more and more manufacturers, such as Cisco, IBM, Estee Lauder, and Haier, have begun to sell directly through online channels. To the best of our knowledge, few research studies investigate the interaction between the manufacturer’s fairness concern and the retailer’s fairness concern in a dual-channel supply chain with a multichannel retailer. (1) How do the fairness concern and the proportion of the retailer’s online sales affect the pricing decisions when the retailer in a dual-channel supply chain sells products through the online and offline channels?. The above research studies focus on the channel selection or channel introduction problem Our work complements these studies by identifying the impact of the fairness concern on the pricing decisions and supply chain performance when the retailer has both online channel and offline channel in a dual-channel supply chain. Few research studies consider the impact of the fairness concerns in a dual-channel supply chain in which the retailer has both online and offline channels. Cai et al [13] Matsui [14] Cattani et al [21] Dzyabura and Jagabathula [23] Chen and Chen [1] Wang et al [2]; Hsiao and Chen [3] Cui et al [4] Caliskan et al [5] Katok et al [8] Ho et al [7] Nie and Du [6]
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