Tripartite game models in a dual-channel supply chain: Competition and cooperation

This paper considers tripartite games in a dual-channel supply chain which involves a manufacturer, an offline retailer and an online retailer. Both competition and cooperation issues are analyzed. In the competition model, a Stackelberg game between the manufacturer and two retailers and a Bertrand game between two retailers occur simultaneously. It is shown that the channel which attracts more consumers' purchase preference is charged a higher wholesale price and it meanwhile declares a higher sales price. In the presence of revenue sharing, cooperation issues between the three participants are studied and the change of the revenue of each participant is analyzed when partial cooperation exists. Further, the definition of the optimum two-player coalition is proposed. We demonstrate that the channel which attracts more preference of consumers is definitely in the optimum coalition. The structure of the two-player coalition is analyzed. Finally, under revenue sharing and cost apportionments, the change of each participant's profit is examined.