Strategic interactions between sales formats and network effects in supply chains: The role of product quality
Weihua Bai
College of Economics and Management, Huazhong Agricultural University
DOI: https://doi.org/10.59429/bam.v7i2.10519
Keywords: Network effects; Wholesale pricing; Agency pricing; Online platforms
Abstract
Our study uses a game-theoretic model to explore a distribution setting where a manufacturer uses wholesale and agency pricing. It focuses on the relationship between network effects and pricing decisions. Results show manufacturers often profit more with agency pricing, while platforms do better with wholesale pricing, especially with low agency costs. Both can benefit under agency pricing in certain ranges. Network effects always benefit supply chain members. Our findings may interest supply chain stakeholders.
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