Research on Nash Equilibrium of Dual-Channel Supply Chain Based on Wholesale Price Discrimination and Sales Efforts

Abstract

The progress of communication technology and the Internet has made the dual-channel supply chain have great development. Supply chain members have to compete and cooperate with other enterprises on the chain in order to obtain greater self-benefit. In the competitive-cooperative relationship among enterprises, price discrimination and sales effort are common tools of operation, and Nash equilibrium theory is a common strategy in the process of supply chain game. Whether manufacturers can promote retailers to implement sales efforts through price discrimination and ensure that the overall revenue of the supply chain is improved at the Nash equilibrium is great significance to both the supply chain and individual enterprises. This paper constructs a decentralized dual-channel supply chain mathematical model composed of an independent manufacturer, an offline retailer, and an online retailer, taking into account the impact of the offline retailer’s sales efforts on his demand and its positive external for the other channel. The revenue matrix of retailers’ decisions about whether or not to pay their sales efforts is built under the condition that manufacturers charge different wholesale prices to different retailers and solves the condition of every decision combination becoming the Nash equilibrium using the Nash equilibrium game theory. Finally, the optimal pricing strategy of the manufacturers is analysed to get the constraints of this dual-channel supply chain achieving Pareto improvement when manufacturer uses wholesale price discrimination strategy.