TITLE:
Game Analysis of Price Competition between Three Echelon Supply Chains
AUTHORS:
Min Tan, Yaxiang Liu
KEYWORDS:
Three Echelon Supply Chain, Price Competition, Bertrand Game, Value-Added Service, Differentiation
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.8 No.12,
December
29,
2018
ABSTRACT: Aiming at the new problem
of price competition between three echelon supply chains, this paper
quantitatively analyzes the reasons for the low price competition under the ten
decision-making forms under the framework of the Bertrand game, and then one of
the supply chains is differentiated by providing value-added services, thus
reducing the impact of price competition on them. It also deduces whether the
critical point of differential investment is to be differentiated, and compares
the value increment of the ten decision forms. The conclusion is: when the
product differentiation is the same, the value of the supply chain of
value-added services depends on the decision form of the other chain, and the
decentralized decision making is the best form of decision. In particular, when
the degree of alienation is relatively large, the difference between the value
of three differentiated investment critical points is 2 times.