Volume 55, Number 5, September-October 2021
|2639 - 2655
|20 September 2021
Should a supplier engage in the marketplace? an equilibrium analysis in a hybrid-format supply chain
School of Management, Guangdong University of Technology, Guangzhou, Guangdong 510520, P.R. China
* Corresponding author: email@example.com
Accepted: 18 August 2021
Recently, e-commerce platforms have been acting as both a reseller and a marketplace to serve consumers. This study considers a hybrid-format supply chain that consists of a supplier who sells a product through an intermediary by a wholesale price contract. In addition, the supplier can decide whether to accept the intermediary’s offer to engage in the marketplace (if the supplier accepts, then the agency fee should be paid to the intermediary). We develop a game-theoretic model to investigate the impact of supplier encroachment on the supply chain members. Then, we extend our basic model to check the robustness of our main results. Our results show that the supplier prefers to engage in the marketplace if the agency fee is low and the order fulfillment cost is relatively low, the intermediary benefits from the supplier encroachment if the agency fee is relatively low, and consumers always benefit from encroachment. Interestingly, we show that an increase in channel substitutability leads to raising the supplier’s willingness to adopt an encroachment strategy. Our findings contribute to the online marketplace literature by providing valuable insights into the operation management of online marketplaces.
Mathematics Subject Classification: 90B50 / 91A80
Key words: Online marketplace / supplier encroachment / channel substitutability / hybrid-format supply chain
© The authors. Published by EDP Sciences, ROADEF, SMAI 2021
This is an Open Access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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