Abstract
We investigate how a manufacturer sets a reward contract to realize supply chain coordination when a retailer's service effort has a showrooming effect. We demonstrate that the manufacturer's reward contract increases retail prices and benefits the retailer but may hurt the manufacturer. Meanwhile, a large unit reward can soften the price competition. We also find that when the unit reward is high, a greater showrooming effect may benefit supply chain members, and the retailer provides a higher service effort.
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