Pricing strategy of dual channel supply chain under asymmetric information

Abstract

Aiming at the dual channel supply chain which sells a single product, and composed of the retailer as the leader and the manufacturer as the follower, firstly, by establishing the Stackelberg game model, we study the manufacturer and the retailer's optimal pricing strategy under the condition of retailer's innovation cost coefficient is common knowledge, then further analyze the manufacturer and the retailer's optimal pricing strategy under the retailer's innovation cost coefficient is his own private information, and discuss the existence condition of perfect Bayesian Nash equilibrium pricing. The research result showed that under the condition of asymmetric information, even the manufacturer has belief revision, his optimal pricing is always consistent with the type of retailer's optimal pricing, but there are several pricing strategy choices to retailer. Under different parameters' values, the dynamic game model with asymmetric information possibly exist separating equilibrium, pooling equilibrium, and semi-separating equilibrium.