Equilibrium contract strategies under asymmetric product substitutability

• Main Authors: Li Baixun, Nan Yaru
• Format: Article
• Language: English
• Published: EDP Sciences 2017-01-01
• Series: MATEC Web of Conferences
• Subjects: game; product substitutability; wholesale-price contract; quantity-discount
• Online Access: https://doi.org/10.1051/matecconf/201710005071

This paper investigates how asymmetric product substitutability affect the equilibrium contract choices as well as the performances of the supply chain players. We consider a market with two competing supply chains, including two competing manufacturers and two common retailers. Two frequently used contracts: wholesale-price and quantity-discount are considered. We find that under whether the wholesale-price or quantity-discount contract can be chosen by manufacturers would depend on the degree of product substitutability.