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On efficiency of multistage channel with bargaining over wholesale prices

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  • Feimin Zhong
  • Jinxing Xie
  • Xiaobo Zhao
  • Zuo‐Jun Max Shen

Abstract

This article considers a multistage channel with deterministic price‐sensitive demand. Two systems for pricing decisions, that is, the bargaining system and the leader‐follower system, are compared. We characterize the necessary and sufficient conditions on the power structure, under which the solution of the bargaining system Pareto dominates that of the leader‐follower system. Also, under such conditions, we give a tight upper bound of channel efficiency of the bargaining system, which converges to 100% channel efficiency as the number of stages increases to infinity. © 2016 Wiley Periodicals, Inc. Naval Research Logistics 63: 449–459, 2016

Suggested Citation

  • Feimin Zhong & Jinxing Xie & Xiaobo Zhao & Zuo‐Jun Max Shen, 2016. "On efficiency of multistage channel with bargaining over wholesale prices," Naval Research Logistics (NRL), John Wiley & Sons, vol. 63(6), pages 449-459, September.
    • Handle: RePEc:wly:navres:v:63:y:2016:i:6:p:449-459
    DOI: 10.1002/nav.21713
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    2. Lu Hsiao & Ying‐Ju Chen & Hui Xiong, 2019. "Supply chain coordination with product line design and a revenue sharing scheme," Naval Research Logistics (NRL), John Wiley & Sons, vol. 66(3), pages 213-229, April.
    3. Lu, Fuxiao & Tang, Wansheng & Liu, Guowei & Zhang, Jianxiong, 2019. "Cooperative advertising: A way escaping from the prisoner’s dilemma in a supply chain with sticky price," Omega, Elsevier, vol. 86(C), pages 87-106.
    4. Saglam, Ismail, 2023. "Must Pollution Abatement Harm the Supplier in a Multi-Echelon Supply Chain?," MPRA Paper 118834, University Library of Munich, Germany.
    5. Zhong, Feimin & Zhou, Zhongbao & Leng, Mingming, 2021. "Negotiation-sequence, pricing, and ordering decisions in a three-echelon supply chain: A coopetitive-game analysis," European Journal of Operational Research, Elsevier, vol. 294(3), pages 1096-1107.
    6. Yang, Huixiao & Chen, Wenbo, 2020. "Game modes and investment cost locations in radio-frequency identification (RFID) adoption," European Journal of Operational Research, Elsevier, vol. 286(3), pages 883-896.
    7. Soroush Safarzadeh, 2023. "A game theoretic approach for pricing and advertising of an integrated product family in a duopoly," Journal of Combinatorial Optimization, Springer, vol. 45(5), pages 1-26, July.

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