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Price Stickiness in a Dual‐Channel Supply Chain
Author(s) -
Saglam Ismail
Publication year - 2025
Publication title -
managerial and decision economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.288
H-Index - 51
eISSN - 1099-1468
pISSN - 0143-6570
DOI - 10.1002/mde.4501
Subject(s) - dual (grammatical number) , shock (circulatory) , microeconomics , pareto principle , economics , nash equilibrium , channel (broadcasting) , supply chain , product (mathematics) , pareto optimal , business , computer science , mathematical optimization , mathematics , operations management , art , literature , marketing , medicine , computer network , geometry , multi objective optimization
ABSTRACT In this paper, we investigate price stickiness in a dual‐channel supply chain where a manufacturer sells its product directly through an online retailer and indirectly through an offline retailer. We construct a noncooperative game where the manufacturer and the offline retailer decide whether or not to costlessly adjust their prices after a demand shock. If the demand shock is positive, then no price can be sticky at the unique Nash equilibrium. If the demand shock is negative, then we additionally observe equilibria where some or all prices can be sticky. We also show that no equilibrium is always Pareto optimal.