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Pricing strategies of a dual-channel supply chain with risk aversion

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  • Liu, Mengqi
  • Cao, Erbao
  • Salifou, Coulibaly Kigbajah

Abstract

We investigated the effect of risk aversion on the optimal policies of a dual-channel supply chain under complete information and asymmetric information cases. We determined that the optimal value added only depends on the value-added cost. The optimal prices under a risk-averse case are lower than those in a risk-neutral case. Information asymmetry increases wholesale and retail prices but reduces direct sale price, and tends to engender inefficiency. The value of information increases with the mean of the manufacturer’s estimation about the retailer’s risk aversion.

Suggested Citation

  • Liu, Mengqi & Cao, Erbao & Salifou, Coulibaly Kigbajah, 2016. "Pricing strategies of a dual-channel supply chain with risk aversion," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 108-120.
    • Handle: RePEc:eee:transe:v:90:y:2016:i:c:p:108-120
    DOI: 10.1016/j.tre.2015.11.007
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    References listed on IDEAS

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