Study on Complex Advertising and Price Competition Dual-Channel Supply Chain Models Considering the Overconfidence Manufacturer

Ma, Junhai; Li, Qiuxiang; Bao, Binshuo

doi:10.1155/2016/2027146

Cited by 8 publications

(7 citation statements)

References 26 publications

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“…Similarly, price and service competition and coordination problems in a dual-channel SC have been studied by some scholars, and the most popular method to coordinate an SC is to draw a coordination contract [17]. Ma et al [18] explore the optimal decisions of two manufacturers who compete on price and local advertising investments and propose a cost-sharing contract. In the study of Li et al [19], a dual-channel SC with green products is considered.…”

Section: Literature Reviewmentioning

confidence: 99%

Price and Service Competition in a Dual-Channel Supply Chain with Product Customization

Jian

Jiang

2021

Complexity

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This paper considers a dual-channel supply chain with product customization. One manufacturer and one retailer are involved. The online direct sales channel sells standard and customized products, and the offline retail channel sells standard products. The prices and service levels of products sold via different channels are differentiated, and the customization level which influences the customization cost and choices of customers is decided by the manufacturer. Three game models are proposed: the manufacturer Stackelberg (MS) model, the retailer Stackelberg (RS) model, and the Nash game model. The price and service decisions of the players are derived. Meanwhile, a service-cost-sharing contract is designed for the MS model. The impacts of price and service competition, service cost, and customers sensitivity to the customization level on the optimal decisions are investigated. Through the numerical analysis, we find that, among the three models, the manufacturer Stackelberg model is the most beneficial game structure for the overall supply chain but has the largest revenue gap between the two members. Second, under price competition and service competition, the manufacturer should differentiate the prices and services for direct sales standard products and customized products according to his market status. Third, the manufacturer should increase customization expenditures to construct his customization production line and provide more diversified products when consumers are more sensitive to product customization.

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Section: Literature Reviewmentioning

confidence: 99%

Price and Service Competition in a Dual-Channel Supply Chain with Product Customization

Jian

Jiang

2021

Complexity

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“…They found that overconfidence is a positive force for competing newsvendors, and it can lead to a better outcome than rational situation when the product's profit is high. Ma et al [37] studied decisions on advertising and price of overconfident manufacturers in a competitive dual-channel supply chain. They found that the profits of manufactures under master-slave model are greater than that of decentralized model, while the profits of retailers are the opposite.…”

Section: Overconfidence-based Operation Managementmentioning

confidence: 99%

“…Real profit of the overprecision manufacturer is 2 ( 1 , 0). According to (37), taking the first derivative of 2 ( 1 , 0) with respect to 1 we obtain…”

Section: The Effect Of Overconfidence On Profitmentioning

confidence: 99%

How Does Overconfidence Affect Decision Making of the Green Product Manufacturer?

Liu

Zhou

Wan

et al. 2019

Mathematical Problems in Engineering

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Overconfidence is a universal and prevalent cognitive bias affecting decision making in operation management. In this paper, overconfidence is defined as a cognitive bias in which decision makers overestimate the accuracy of demand forecasting or (and) the demand itself. We call these two behaviors overprecision and overestimation, respectively. In order to explore how overconfidence affects decision making of the green product manufacturer, we build the demand function based on the manufacturer’s overconfidence and establish a newsboy-based model. Then the influence of overconfidence on product greenness, output, and profit is mainly discussed. We have several new sights as follows. First, overconfidence makes the manufacturer produce greener products than the rational manufacturer, and overestimation results in a higher greenness deviation than overprecision. Second, the influence of overconfidence on the output of green products is quite different from that of nongreen products. Specifically speaking, overestimation makes the manufacturer produce more products than the rational manufacturer, so do the overprecision manufacturer and the dual-overconfident manufacturer under the low-profit condition. But in high-profit condition, when greening investment factor is low and (or) consumers are sensitive enough to greenness, the overprecision manufacturer produces more than the rational manufacturer; when the level of overestimation exceeds a threshold, output of the dual-overconfident is greater than that of the rational manufacturer. Third, overconfidence makes the real profit of the manufacturer less than optimal profit of the rational manufacturer. There is a positive cross-effect of overprecision and overestimation in real profit of the dual-overconfident manufacturer. That is, to some extent, one kind of overconfidence can offset the decline in profit caused by the other kind of overconfidence.

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“…Lu et al [32] studied inventory decision-making and performance evaluation under various overconfidence forms, respectively. Ma et al [33] studied advertising and pricing strategies of overconfident manufacturers in dual channel competition environment. Li et al [34] studied the effects and implications of overconfidence in a competitive newsvendor setting.…”

Section: Literature Reviewmentioning

confidence: 99%

Inventory Financing with Overconfident Supplier Based on Supply Chain Contract

Jiang

Liu

2018

Mathematical Problems in Engineering

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Overconfidence is a universal psychological behavior. Overconfidence on demand awareness will have a significant impact on operation decisions. The supplier estimated the demand with excessive precision which influences the inventory financing decision-making deeply. We built the demand function based on the supplier’s overconfidence. Then we established the retailer, supplier, and the Bank’s profit function, respectively. Through the analysis of the bilevel Stackelberg game, we obtained the order quantity of the retailer with the capital constraint, the wholesale price of overconfident supplier, and the loan-to-value ratio of Bank, and we analyzed the influence of overconfidence on the decision variables. We have several findings as follows. First, the overconfidence makes the decisions of the retailer, supplier, and Bank deviate from the rational decisions. Second, the space of the market profit will affect the decision variables in the joint decision-making. Third, the financing supply chain (including the Bank and supply chain) should have a positive attitude towards the overconfidence of the supplier. Forth, in the joint decision-making, the supplier need determines the buyback price according to the capital demand; and in the decentralized decision-making, the supplier should try to use high buyback price strategy.

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Study on Complex Advertising and Price Competition Dual-Channel Supply Chain Models Considering the Overconfidence Manufacturer

Cited by 8 publications

References 26 publications

Price and Service Competition in a Dual-Channel Supply Chain with Product Customization

Price and Service Competition in a Dual-Channel Supply Chain with Product Customization

How Does Overconfidence Affect Decision Making of the Green Product Manufacturer?

Inventory Financing with Overconfident Supplier Based on Supply Chain Contract

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