Abstract
We model a dual-channel supply chain consisting of one manufacturer and one retailer, and consider two scenarios — under one scenario the manufacturer solely provides the information service and under the other the retailer solely provides the information service. Both the manufacturer’s and the retailer’s pricing decisions and profits are compared. We find that: The firm has stronger social ties with customers will be willing to provide more information services. When the manufacturer provides information service, it charges a higher direct price than the wholesale price; whether the direct-channel price is higher than the retail price depends on the strength of the manufacturer’s social ties with customers. When the retailer provides information service, the direct price is equal to the wholesale price, both lower than the retail price. Both the manufacturer and the retailer can benefit more from the information service provided by themselves. The whole dual-channel supply chain will be more profitable when the manufacturer provides the information service.
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