Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
6898781 | European Journal of Operational Research | 2010 | 18 Pages |
Abstract
Motivated by the business practice whereby some manufacturers open their own retail stores despite the existence of more efficient independent retailers, this paper examines the distribution channel choice of competing manufacturers under demand uncertainty and resale price maintenance. We characterize the conditions for the equilibrium channel structures. We find that (1) manufacturers tend to distribute products with more design attributes through their own retail stores, (2) manufacturers with highly substitutable products are more likely to use independent retailers, and (3) at least one manufacturer has more incentive to open its own retail stores when facing an increase of the market size asymmetry.
Related Topics
Physical Sciences and Engineering
Computer Science
Computer Science (General)
Authors
Wen Cao, Bo Jiang, Deming Zhou,