Game Analysis of Dual-channel Supply Chain Based on Different Rights Structure

Abstract

Based on members' different bargaining power in a dual channels system, this paper discusses the impact ofthree games on channel pricing, demand and members' profits by building Manufacturer Stackelberg, Retailer Stackelberg and Vertical Nash game model.The study finds that:(1) When the coefficient of cross-price elasticity of demand is 0, the effects of the three game strategies on the competitive equilibrium solution of the two-channel supply chain are undifferentiated. (2) When the coefficient of cross-price elasticity of demand is not 0, under the Stackelberg game dominated by the retailer (manufacturer), the traditional channel (direct channel) has the highest pricing, and the demand of the traditional channel (direct channel) is the smallest, while the demand of the traditional channel (demand of the direct channel) is the largest in the Stackelberg game dominated by the manufacturer (retailer); both manufacturers and retailers are willing to choose to give up their power and do the Stackelberg game. Both manufacturers and retailers are willing to give up power in favor of being a follower of the Stackelberg game, and the Nash game is always a strict downside for the game participants. Finally, the validity of the conclusions is further tested by case studies.