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Two-period pricing strategies in a two-echelon supply chain with conspicuous consumption. (English) Zbl 1423.90028

Summary: This paper investigates the problem of pricing strategies in a two-echelon supply chain with conspicuous consumers. We develop a two-period pricing model for the supply chain which is consisted of one manufacturer and one retailer who involve in trading a single product. The manufacturer being a Stackelberg leader, decides the wholesale price, the retailer acts as a follower and sets the selling price. As a leader, the manufacturer has two pricing options: (1) sets a common wholesale price for the entire selling season; (2) sets two different wholesale prices for the two selling periods respectively. Based on the manufacturer’s pricing options, we develop four pricing cases considering the effect of conspicuous consumption and compare the equilibrium outcomes. In addition, we study the impacts of the main parameters on the equilibrium results under different cases in the numerical study and obtain some managerial insights.

MSC:

90B06 Transportation, logistics and supply chain management
90B50 Management decision making, including multiple objectives
91A80 Applications of game theory
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