IDEAS home Printed from https://ideas.repec.org/a/taf/cijwxx/v32y2016i6p895-911.html
   My bibliography  Save this article

Two-part pricing contracts under competition: the South-to-North Water Transfer Project supply chain system in China

Author

Listed:
  • Wenyi Du
  • Yubing Fan
  • Xiaowo Tang

Abstract

This study analyzes the water supply chain system of the Eastern Route of the South-to-North Water Transfer Project in China. The article compares the impacts of competition intensity on profits of two water distributors and the water supply chain system under two-part pricing contracts versus wholesale price contracts. When the upstream water supplier offers two-part pricing contracts, the water quantity and expected profits of both distributors decrease as the competition intensity increases. The expected profits of the supply chain system decrease, but are greater than the profits under wholesale price contracts. The government can control fixed costs to balance the profits of suppliers and distributors.

Suggested Citation

  • Wenyi Du & Yubing Fan & Xiaowo Tang, 2016. "Two-part pricing contracts under competition: the South-to-North Water Transfer Project supply chain system in China," International Journal of Water Resources Development, Taylor & Francis Journals, vol. 32(6), pages 895-911, November.
    • Handle: RePEc:taf:cijwxx:v:32:y:2016:i:6:p:895-911
    DOI: 10.1080/07900627.2015.1124755
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/07900627.2015.1124755
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/07900627.2015.1124755?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. K. Sridhar Moorthy, 1988. "Strategic Decentralization in Channels," Marketing Science, INFORMS, vol. 7(4), pages 335-355.
    2. Gérard P. Cachon & A. Gürhan Kök, 2010. "Competing Manufacturers in a Retail Supply Chain: On Contractual Form and Coordination," Management Science, INFORMS, vol. 56(3), pages 571-589, March.
    3. Timothy W. McGuire & Richard Staelin, 1983. "An Industry Equilibrium Analysis of Downstream Vertical Integration," Marketing Science, INFORMS, vol. 2(2), pages 161-191.
    4. Banerjee, Samiran & Lin, Ping, 2003. "Downstream R&D, raising rivals' costs, and input price contracts," International Journal of Industrial Organization, Elsevier, vol. 21(1), pages 79-96, January.
    5. Minakshi Trivedi, 1998. "Distribution Channels: An Extension of Exclusive Retailership," Management Science, INFORMS, vol. 44(7), pages 896-909, July.
    6. Albert Y. Ha & Shilu Tong & Hongtao Zhang, 2011. "Sharing Demand Information in Competing Supply Chains with Production Diseconomies," Management Science, INFORMS, vol. 57(3), pages 566-581, March.
    7. Sudheer Gupta & Richard Loulou, 1998. "Process Innovation, Product Differentiation, and Channel Structure: Strategic Incentives in a Duopoly," Marketing Science, INFORMS, vol. 17(4), pages 301-316.
    8. Gilbert, Stephen M. & Cvsa, Viswanath, 2003. "Strategic commitment to price to stimulate downstream innovation in a supply chain," European Journal of Operational Research, Elsevier, vol. 150(3), pages 617-639, November.
    9. Jean-Daniel Rinaudo & Noémie Neverre & Marielle Montginoul, 2012. "Simulating the Impact of Pricing Policies on Residential Water Demand: A Southern France Case Study," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(7), pages 2057-2068, May.
    10. Banerjee, Samiran & Lin, Ping, 2001. "Vertical research joint ventures," International Journal of Industrial Organization, Elsevier, vol. 19(1-2), pages 285-302, January.
    11. Wenquan Gu & Dongguo Shao & Yufang Jiang, 2012. "Risk Evaluation of Water Shortage in Source Area of Middle Route Project for South-to-North Water Transfer in China," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 26(12), pages 3479-3493, September.
    12. Zhisong Chen & Huimin Wang & Xiangtong Qi, 2013. "Pricing and Water Resource Allocation Scheme for the South-to-North Water Diversion Project in China," Water Resources Management: An International Journal, Published for the European Water Resources Association (EWRA), Springer;European Water Resources Association (EWRA), vol. 27(5), pages 1457-1472, March.
    13. Charles J. Corbett & Uday S. Karmarkar, 2001. "Competition and Structure in Serial Supply Chains with Deterministic Demand," Management Science, INFORMS, vol. 47(7), pages 966-978, July.
    14. Albert Y. Ha & Shilu Tong, 2008. "Contracting and Information Sharing Under Supply Chain Competition," Management Science, INFORMS, vol. 54(4), pages 701-715, April.
    Full references (including those not matched with items on IDEAS)

    Citations

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


    Cited by:

    1. Wenyi Du & Yubing Fan & Lina Yan, 2018. "Pricing Strategies for Competitive Water Supply Chains under Different Power Structures: An Application to the South-to-North Water Diversion Project in China," Sustainability, MDPI, vol. 10(8), pages 1-13, August.
    2. Rabbani, Maysam, 2024. "Internet price, speed, and disparity: The case of rural healthcare providers in the United States," Telecommunications Policy, Elsevier, vol. 48(2).
    3. Wenxue Ran & Teng Xu, 2023. "Low-Carbon Supply Chain Coordination Based on Carbon Tax and Government Subsidy Policy," Sustainability, MDPI, vol. 15(2), pages 1-19, January.
    4. Zhisong Chen & Keith C.K. Cheung & Manyi Tan, 2019. "Inter-Basin Water Transfer Supply Chain Coordination with Ramsey Pricing," IJERPH, MDPI, vol. 16(19), pages 1-22, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Bai-Xun & Zhou, Yong-Wu & Li, Ji-zi & Zhou, Shi-ping, 2013. "Contract choice game of supply chain competition at both manufacturer and retailer levels," International Journal of Production Economics, Elsevier, vol. 143(1), pages 188-197.
    2. Li, Xiaojing & Chen, Jing & Ai, Xingzheng, 2019. "Contract design in a cross-sales supply chain with demand information asymmetry," European Journal of Operational Research, Elsevier, vol. 275(3), pages 939-956.
    3. Xiaojing Li & Xingzheng Ai, 2021. "A choice of selling format in the online marketplace with cross-sales supply chain: Platform selling or traditional reselling?," Electronic Commerce Research, Springer, vol. 21(2), pages 393-422, June.
    4. Jianhua Ma & Xingzheng Ai & Wen Yang & Yanchun Pan, 2019. "Decentralization versus coordination in competing supply chains under retailers’ extended warranties," Annals of Operations Research, Springer, vol. 275(2), pages 485-510, April.
    5. Lu, Lijian & Wu, Yaozhong, 2015. "Preferences for contractual forms in supply chains," European Journal of Operational Research, Elsevier, vol. 241(1), pages 74-84.
    6. Fang, Yaner & Shou, Biying, 2015. "Managing supply uncertainty under supply chain Cournot competition," European Journal of Operational Research, Elsevier, vol. 243(1), pages 156-176.
    7. Liu, Bingbing & Yu, Yugang & Guo, Xiaolong, 2021. "Simpler and better: Supply chain contracting in the presence of contract unobservability and upstream competition," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 154(C).
    8. Wang, Sujuan & Hu, Qiying & Liu, Weiqi, 2017. "Price and quality-based competition and channel structure with consumer loyalty," European Journal of Operational Research, Elsevier, vol. 262(2), pages 563-574.
    9. Yang, Shilei & Shi, Victor & Jackson, Jonathan E., 2015. "Manufacturers׳ channel structures when selling asymmetric competing products," International Journal of Production Economics, Elsevier, vol. 170(PB), pages 641-651.
    10. Li, Wei & Zhao, Xuan & Chen, Jing, 2023. "Co-opetition or decentralization? A study of manufacturers’ sourcing and distribution strategies," European Journal of Operational Research, Elsevier, vol. 311(3), pages 867-886.
    11. Li Jiang & Zhongyuan Hao, 2016. "Incentive-Driven Information Dissemination in Two-Tier Supply Chains," Manufacturing & Service Operations Management, INFORMS, vol. 18(3), pages 393-413, July.
    12. de Matta, Renato & Lowe, Timothy J. & Zhang, Dengfeng, 2017. "Competition in the multi-sided platform market channel," International Journal of Production Economics, Elsevier, vol. 189(C), pages 40-51.
    13. Edirisinghe, N.C.P. & Bichescu, B. & Shi, X., 2011. "Equilibrium analysis of supply chain structures under power imbalance," European Journal of Operational Research, Elsevier, vol. 214(3), pages 568-578, November.
    14. Fang Fang & Baojun Jiang & Jiong Sun, 2023. "Partial vertical ownership in the presence of downstream competition," Production and Operations Management, Production and Operations Management Society, vol. 32(6), pages 1692-1704, June.
    15. Lusheng Shao & Xiaole Wu & Fuqiang Zhang, 2020. "Sourcing Competition under Cost Uncertainty and Information Asymmetry," Production and Operations Management, Production and Operations Management Society, vol. 29(2), pages 447-461, February.
    16. Stephen M. Gilbert & Gang Yu & Yusen Xia, 2007. "The strategic effects of a merger upon supplier interactions," Naval Research Logistics (NRL), John Wiley & Sons, vol. 54(2), pages 162-175, March.
    17. Wenyi Du & Yubing Fan & Lina Yan, 2018. "Pricing Strategies for Competitive Water Supply Chains under Different Power Structures: An Application to the South-to-North Water Diversion Project in China," Sustainability, MDPI, vol. 10(8), pages 1-13, August.
    18. Choi, Tsan-Ming & Li, Yongjian & Xu, Lei, 2013. "Channel leadership, performance and coordination in closed loop supply chains," International Journal of Production Economics, Elsevier, vol. 146(1), pages 371-380.
    19. Wu, Cheng-Han & Chen, Chieh-Wan & Hsieh, Chung-Chi, 2012. "Competitive pricing decisions in a two-echelon supply chain with horizontal and vertical competition," International Journal of Production Economics, Elsevier, vol. 135(1), pages 265-274.
    20. Albert Y. Ha & Quan Tian & Shilu Tong, 2017. "Information Sharing in Competing Supply Chains with Production Cost Reduction," Manufacturing & Service Operations Management, INFORMS, vol. 19(2), pages 246-262, May.

    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:taf:cijwxx:v:32:y:2016:i:6:p:895-911. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/cijw20 .

    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.