Decentralization versus coordination for an incumbent chain and an entrant chain under a Stackelberg game

作者：Cao, Zonghong; Zhao, Ju^*; Zhang, Chengtang

来源：IAENG International Journal of Applied Mathematics, 2018, 48(2): 177-183.

• Asymmetric information
• Channel structures
• Competitive advantage
• Decentralized structures
• Equilibrium structures
• Optimal structures
• Power imbalance
• Stackelberg Games

This paper considers the issue of channel structure selection when an incumbent supply chain faces a potential entrant supply chain. Each chain can choose its channel structure, namely, decentralization or coordination. Specifically, both the incumbent manufacturer and the entrant manufacturer can choose to sell their products by themselves or through their exclusive retailers. Our objective is to discuss whether the entrant chain should enter the retail market and, if so, how the dominant manufacturer of each chain strategically selects the channel structure, and how the asymmetric cost information affects the equilibrium structure. The results show that (1)Under asymmetric information game, the chain without competitive advantage is more likely to exit market when the intensity of price competition increases. (2)Under the symmetric information game, both coordination and decentralization can be the optimal structure for the entrant chain and the optimal entry depends on the incumbent chains action. In contrast, under the asymmetric information game, the entrant chain prefers coordinated structure rather than decentralized structure. (3)As the entrant products competitiveness increases, the incumbent manufacturer will switch from coordinated structure to decentralized structure. (4)When the price competition intensity increases, the entrant manufacturer will change coordinated structure into decentralized structure.

• 出版日期2018
• 单位合肥工业大学