Pricing decisions for substitutable products in a two-echelon supply chain with firms׳ different channel powers

Pricing decisions for two substitutable products in a supply chain with one common retailer and two competitive manufacturers are considered in this paper. The purpose of this paper is to analyze the effects of the two manufacturers׳ different competitive strategies and the channel members׳ different power structures on the optimal pricing decisions. One centralized pricing model and seven decentralized pricing models are developed, and the corresponding analytical equilibrium solutions are obtained by using game-theoretic approach. Finally, numerical studies are presented to illustrate the effectiveness of the theoretical results, and to gain additional managerial insights.