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Pricing and Service Effort Decisions of Book Dual-Channel Supply Chains with Showrooming Effect Based on Cost-Sharing Contracts

Author

Listed:
  • Yanwei Chen

    (Faculty of Humanities and Social Sciences, City University of Macau, Macau 999078, China)

  • Xiaojun Liu

    (School of Business, Shenzhen Institute of Technology, Shenzhen 518116, China)

  • Kaiqing Huang

    (School of Business, Macau University of Science and Technology, Macau 999078, China)

  • Huajun Tang

    (School of Business, Macau University of Science and Technology, Macau 999078, China)

Abstract

It is becoming increasingly difficult to ignore circular and sustainable economies. A traditional chain transits to a dual-channel supply chain, extending its online channel for more customers, and keeping its offline channel so as to reduce resource utilization for sustainable business. However, there exists some conflict between offline and online channels, such as the showrooming effect (i.e., customers visit an offline store to experience products but then buy them online with a lower price). This work studies a three-echelon book dual-channel supply chain involving an author, an online publisher and an offline retailer. Based on Stackelberg game theory, it investigates the optimal pricing solutions and the optimal retailer’s service effort level with two copyright models and considers the showrooming effect based on either decentralized or centralized decision-making. Afterwards, it develops a cost-sharing contract to make them achieve Pareto optimality. Furthermore, this research studies the influence of the showrooming effect on the optimal decisions and the profits of each member through theoretical and numerical analyses. The findings show that a well-designed contract can lead dual-channel members to cut down the negative impact of the showrooming effect and realize the win–win situation. Finally, it proposes some managerial insights and possible directions for the future.

Suggested Citation

  • Yanwei Chen & Xiaojun Liu & Kaiqing Huang & Huajun Tang, 2022. "Pricing and Service Effort Decisions of Book Dual-Channel Supply Chains with Showrooming Effect Based on Cost-Sharing Contracts," Sustainability, MDPI, vol. 14(18), pages 1-23, September.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:18:p:11278-:d:910165
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    References listed on IDEAS

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    1. Haiping Ren & Rui Chen, 2023. "Porcelain Supply Chain Coordination Considering the Preferences of Consumers against the Background of E-Commerce," Sustainability, MDPI, vol. 15(13), pages 1-19, June.

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