Resale Price Maintenance with Strategic Customers

• 成果类型: Article
• 署名作者: Bazhanov, Andrei; Levin, Yuri; Nediak, Mikhail
• 署名单位: Queens University - Canada
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12936
• 发表日期: 2019
• 页码: 535-549
• 关键词: MARKET SHARE; supply chain; Demand uncertainty; Discount rates; BEHAVIOR; COMPETITION; purchase

摘要

We consider a decentralized supply chain (DSC) under resale price maintenance (RPM) selling a limited-lifetime product to forward-looking customers with heterogeneous valuations. When customers do not know the inventory level, double marginalization under RPM leads to a higher profit and aggregate welfare than without RPM under a two-part tariff contract (TT). Both RPM and TT profits are higher and aggregate welfare is lower than in a centralized supply chain (CSC). When customers know the inventory, RPM coincides with CSC. Thus, overestimation of customer awareness may lead to overcentralization of supply chains with profit loss comparable with the loss from strategic customers. The case of RPM with unknown inventory is extended to an arbitrary number of retailers with inventory-independent and inventory-dependent demand. In both cases, the manufacturer, by setting a higher wholesale price, mitigates the inventory-increasing effect of competition and reaches the same profit as with a single retailer. The high viability and efficiency of RPM in using double marginalization as a strategic-behavior-mitigating tool may serve as another explanation of why manufacturers may prefer DSC with RPM to a vertically integrated firm.