Equilibrium Strategies of Asymmetric Dual-channel Supply Chain Based on Different Fairness Preference Models

China Business and Market - - CHINA BUSINESS AND MARKET - WU Zheng-xiang and LI Bao-ku


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(Liaoning Technical University,Liaoning,Huludao125105,China)

Abstract:The authors consider a dual-channel supply chain model comprised of one manufacturer,one online retailer,and one large traditional retailer with price leadership. Under the differential pricing of manufacturer,the authors carry out studies on the impact of large traditional retailer’s fairness preference with different reference point on the equilibrium strategies of supply chain. According to the characteristics of the fairness reference point,the authors select the FS model and BO model to depict the fairness preference of large traditional respectively,and construct different fairness preference game model. The model analysis shows that the large traditional retailer's fairness about other members' absolute profit or the supply chain’s average profit will not change the wholesale price of network channel,but will cause different changes on the traditional channel’s wholesale price and retail price,the network channel’s retail price as well as the profit of the parties. In the FS model,the vertical distribution fairness and the horizontal peer-induced fairness of large traditional retailer exists interaction effects,and both of them have the opposite impact on the bargaining power of large traditional retailer with manufacturer and the degree of the retail market competition. In the BO model,the fairness preference of large traditional retailer has two different effects on the bargaining power of him with manufacturer and the degree of the retail market competition. Regardless of the fairness reference point that large traditional retailer chooses,his fairness preference is not an effective means for him to obtain the gains of the channel. There is not always best fairness reference point for manufacturer and online retailer. To better develop dual- channel sales,manufacturers should effectively understand large traditional retailers’fairness preference based on historical transaction data and the communication and feedbacks of related employers.

Key words:large traditional retailer;dual-channel supply chain;fairness preference;reference point

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