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Pricing Decision under Dual-Channel Structure considering Fairness and Free-Riding Behavior
Author(s) -
Yongmei Liu,
Chunjie Ding,
Fan Chen,
Xiaohong Chen
Publication year - 2014
Publication title -
discrete dynamics in nature and society
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.264
H-Index - 39
eISSN - 1607-887X
pISSN - 1026-0226
DOI - 10.1155/2014/536576
Subject(s) - channel (broadcasting) , dual (grammatical number) , free riding , business , service (business) , computer science , microeconomics , marketing , computer network , economics , art , literature , incentive
Under dual-channel structure, the free-riding behavior based on different service levels between online channel and offline channel cannot be avoided, which would lead to channel unfairness. This study implies that the dual-channel supply chain is built up by online channel controlled by manufacturer and traditional channel controlled by retailer, respectively. Under this channel structure, we rebuild the linear demand function considering free-riding behavior and modify the pricing model based on channel fairness. Then the influences of fair factor and free-riding behavior on manufacturer and retailer pricing and performance are discussed. Finally, we propose some numerical analysis to provide some valuable recommendations for manufacturer and retailer improving channel management performance

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