Competition between Manufacturer and Retailer for Price and Service Based on Multiproduct

Abstract

This research studies a case that there is a manufacturer producing two competing products and selling them through a retailer. The consumer demand depends on two factors:  retail price and service level, which are provided by the retailer. This article is based on Retailer Stackelberg. Game-theoretic framework is applied to find the equilibrium solutions for every participant. Our research has conclusions as follow: first, both manufacturer and retailer have benefits from providing service; second, as market base of one product increases, manufacturer and retailer have benefits from it, and the other product also earns profit at a less amount; third, when retailer has some economic advantage in providing a product service, both manufacturer and retailer have benefits from it, although the other product damnifies the profit of retailer slightly
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