Abstract
While the Internet has provided a new means for retailers to reach consumers, it has fundamentally changed the dynamic of competition in the retail service supply chain. The mix of offline and online channels adds a new dimension of competition, and one central issue of this competition is the pricing strategy between the two channels. How to set prices for both online and offline channels? What is the impact of the supply chain power structure on pricing decisions and the performance? This research aims to address these questions by focusing on a retail service supply chain with an online-to-offline (O2O) mixed dual-channel. From the Supplier-Stackelberg, Retailer-Stackelberg, and Nash game theoretical perspectives, we obtain the optimal prices and maximum profits for both the retailer and supplier under different power structures. The analysis result provides important managerial implications, which will be beneficial to retailers to develop proper pricing strategies.
Original language | English |
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Pages (from-to) | 294-301 |
Number of pages | 8 |
Journal | Journal of the Operational Research Society |
Volume | 67 |
Issue number | 2 |
DOIs | |
Publication status | Published - 1 Feb 2016 |
Bibliographical note
Funding Information:Acknowledgements—The authors would like to thank the anonymous referees and the editor for their constructive comments on the earlier version of the paper. The first two authors are supported by the Royal Society International Exchanges cost share scheme (Ref. IE131228) with National Natural Science Foundation of China (No. 71411130137). The first author is also partially supported by National Natural Science Foundation of China (No. 71272128, 71432003), Program for New Century Excellent Talents in University (No. NCET-12-0087), Specialized Research Fund for the Doctoral Program of Higher Education (No. 20130185110006), and Youth Foundation for Humanities and Social Sciences of Ministry of Education of China (No. 11YJC630022).
Publisher Copyright:
© 2016 Operational Research Society Ltd. All rights reserved.
Keywords
- dual-channel
- pricing; game theory
- retail service
- supply chain management
ASJC Scopus subject areas
- Management Information Systems
- Strategy and Management
- Management Science and Operations Research
- Marketing