no. 1
Price decisions with asymmetric reference effect and information sharing in dual-channel supply chains
RAIRO. Operations Research, Tome 56 (2022) no. 1, pp. 445-473

This paper considers a retailer-manufacturer dual-channel supply chain (DCSC) consisting of a retail channel and a direct sale channel. Previous literature has shown that either asymmetric reference effect (ARE) or information sharing (IS) significantly impacts customers’ demand, then the channel members’ pricing decisions. As yet, no literature has examined the joint effect of both on the channel members’ pricing decisions, especially in a DCSC. To fill up the deficiency, we first explore and compare the pricing decisions in a centralized and a decentralized DCSC with ARE, respectively, with and without IS, using the Stackelberg game and two-stage optimization technique. Then we evaluate the values of ARE and IS by introducing model misspecification and numerical experiments. We find that substantial revenue will be lost if the retailer ignores ARE when information is shared than not shared, especially when the channel members are pessimistic about the market. A higher reference price or a weaker ARE induces the channel members to increase prices, and make IS more valuable to them. Besides, whether the information is shared or not, channel members generally underestimate revenues under a relatively high reference price, while overestimating the revenues under a relatively small reference price. Furthermore, the manufacturer conditionally accepts the IS while the retailer always accepts it.

DOI : 10.1051/ro/2022018
Classification : 91A40, 91B50
Keywords: Supply chain management, asymmetric reference effect, information sharing, dual-channel, Stackelberg game 
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     year = {2022},
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Zhao, Nenggui; Wang, Qiang; Wu, Jie. Price decisions with asymmetric reference effect and information sharing in dual-channel supply chains. RAIRO. Operations Research, Tome 56 (2022) no. 1, pp. 445-473. doi: 10.1051/ro/2022018

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