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Dynamic analysis of pricing model in a book supply chain

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  • Mai, Fengxia
  • Zhang, Jianxiong
  • Sun, Xiaojie

Abstract

Based on two formats of books − paper book and electronic book, book publishers often sell their products to online consumers through e-tailers by adopting reselling mode and agency selling mode simultaneously. This paper develops a dynamic pricing game model on basis of a long-term gradient adjustment mechanism for a book supply chain that consists of a publisher and an e-tailer, and focuses on the impacts of agency fee rate and adjustment speed on the complexity of the dynamic game. We compare the system stability and the average profits for a dynamic decentralized decision and a dynamic centralized decision. The results show that a higher agency fee rate makes the dynamic system more stable, and a higher adjustment speed makes the dynamic system become more unstable with exhibiting a period doubling bifurcation. Moreover, the dynamic decentralized system is more stable than the dynamic centralized system as the adjustment speed increases. Under the dynamic decentralized decision, the profits of the publisher and the supply chain decrease while the e-tailer's profit increases when the game system loses its stability. In addition, it is interesting to find that in a certain parameter region, the profit of the supply chain under the dynamic decentralized decision is higher than that under the dynamic centralized decision.

Suggested Citation

  • Mai, Fengxia & Zhang, Jianxiong & Sun, Xiaojie, 2021. "Dynamic analysis of pricing model in a book supply chain," International Journal of Production Economics, Elsevier, vol. 233(C).
    • Handle: RePEc:eee:proeco:v:233:y:2021:i:c:s0925527321000025
    DOI: 10.1016/j.ijpe.2021.108026
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    References listed on IDEAS

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    2. Zhang, Zhichao & Xu, Haiyan & Ke, Ginger Y. & Chen, Kebing, 2022. "Selecting online distribution modes for differentiated products in a platform supply chain," International Journal of Production Economics, Elsevier, vol. 244(C).

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