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Discrete Dynamics in Nature and Society
Volume 2014, Article ID 536576, 10 pages
http://dx.doi.org/10.1155/2014/536576
Research Article

Pricing Decision under Dual-Channel Structure considering Fairness and Free-Riding Behavior

Business School, Central South University, Changsha, Hunan 410083, China

Received 3 March 2014; Accepted 7 May 2014; Published 26 May 2014

Academic Editor: Fenghua Wen

Copyright © 2014 Yongmei Liu et al. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

Abstract

Under dual-channel structure, the free-riding behavior based on different service levels between online channel and offline channel cannot be avoided, which would lead to channel unfairness. This study implies that the dual-channel supply chain is built up by online channel controlled by manufacturer and traditional channel controlled by retailer, respectively. Under this channel structure, we rebuild the linear demand function considering free-riding behavior and modify the pricing model based on channel fairness. Then the influences of fair factor and free-riding behavior on manufacturer and retailer pricing and performance are discussed. Finally, we propose some numerical analysis to provide some valuable recommendations for manufacturer and retailer improving channel management performance.