An Analysis of Vertical Control Policy in Two-Level Channel: Embedding Opportunism of Dealer in Inter-Brand Competition

• Main Authors: Shang-Hua Hsieh, 謝尚樺
• Other Authors: 周雍強
• Format: Others
• Language: zh-TW
• Published: 2008
• Online Access: http://ndltd.ncl.edu.tw/handle/56939491713881034580

碩士 === 國立臺灣大學 === 工業工程學研究所 === 96 === In the duopoly market, product quality of two firms is different. Price and quality of Name Brand products are higher, and price and quality of Generic Brand products are lower. Name Brand’s channel is two-level, including manufacturer, dealer and retailer. For preventing intra-brand competition in downstream from harming the corporate image or profit, the upstream manufacturer often uses the vertical restraint policy, like Resale Price Maintanence to control the behavior of dealers. However, while eliminating the disadvantage from intra-brand competition, dealers under inter-brand competition could speculate in opportunism. This thesis shows that upstream manufacturers in two-level channel can use “implicit control policy” to control dealer opportunism which RPM can not control when facing inter-brand price and quality competition. Manufacturers must predict dealer’s behavior and embed their opportunistic behavior in its pricing decision. The research develops a mathematical model of brand name’s implicit contorl policy, analyzing the policy’s effect in the channel at first, then considers the effect in inter-brand competition. The results show that manufacturers can make an equilibrium price and indirectly control dealer’s opportunism through “impilcit control policy.” But, results also show that the policy does not always work under inter-brand competition, dealer’s opportunism sometimes helps manufacturer gain more profit. The policy’s effect deppends on profit allocation by RPM : if manufacturers allocate more profit to dealers, dealers’ opportunism is smaller and dealers also prevent severe price competition between brands, manufacturers can make more profit by not controling dealers’ opportunism.