IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v67y2016i2p312-324.html
   My bibliography  Save this article

Dominance, bargaining power and service platform performance

Author

Listed:
  • Jiahong Zhang

    (University of Science of Technology of China, Hefei, P.R. China)

  • Yong Zha

    (University of Science of Technology of China, Hefei, P.R. China)

  • Xiaohang Yue

    (University of Wisconsin-Milwaukee, Milwaukee, USA
    Dongbei University of Finance and Economics, Dalian, P.R. China)

  • Zhongsheng Hua

    (University of Science of Technology of China, Hefei, P.R. China)

Abstract

In this paper we study the relationship between a firm (hotel) and a service platform (Ctrip.com). We start with a newsvendor hotel facing two kinds of customers. D-customers order the room directly from the hotel front desk; C-customers order the room through Ctrip.com. Ctrip.com charges the hotel while introducing its members to the hotel. The hotel decides how many rooms are allotted to Ctrip.com to achieve optimal profit. We consider the situation where one party’s demand cannot be observed by another, and study the commonly used wholesale price contract. Interestingly, the contract can always coordinate the system. We then investigate the influence of bargaining power on the profit division under situations where Ctrip.com and hotel, respectively, dominate the system, and find that increasing (or decreasing) a party’s bargaining power without considering the other does not necessarily benefit (or damage) the first party. Further, we discuss how the parties choose dominance and appropriate bargaining power to make a trade-off for better cooperation. An interesting phenomenon is that bargaining power for each party can be identical when any party dominates the system. We also propose a threshold at which the wholesale price contracts can always be the Pareto optimal for the channel.

Suggested Citation

  • Jiahong Zhang & Yong Zha & Xiaohang Yue & Zhongsheng Hua, 2016. "Dominance, bargaining power and service platform performance," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 67(2), pages 312-324, February.
    • Handle: RePEc:pal:jorsoc:v:67:y:2016:i:2:p:312-324
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/jors/journal/v67/n2/pdf/jors201544a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/jors/journal/v67/n2/full/jors201544a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Janosch Brinker & Hans-Dietrich Haasis, 2022. "Power in the Context of SCM and Supply Chain Digitalization: An Overview from a Literature Review," Logistics, MDPI, vol. 6(2), pages 1-19, March.
    2. Zhang, Tao & Li, Gang & Lai, Kin Keung & Leung, John W.K., 2018. "Information disclosure strategies for the intermediary and competitive sellers," European Journal of Operational Research, Elsevier, vol. 271(3), pages 1156-1173.
    3. Xu, Xiaoping & Zhang, Mian & He, Ping, 2020. "Coordination of a supply chain with online platform considering delivery time decision," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:67:y:2016:i:2:p:312-324. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.