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Discrete Dynamics in Nature and Society
Volume 2016, Article ID 1565416, 9 pages
http://dx.doi.org/10.1155/2016/1565416
Research Article

Contracting for Competitive Supply Chains under Network Externalities and Demand Uncertainty

School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 611731, China

Received 1 January 2016; Accepted 15 March 2016

Academic Editor: Elmetwally Elabbasy

Copyright © 2016 Xiaojing Liu. 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

Based on network externalities and demand uncertainty environment, supply chain competition model is built; we identify the valid mechanism for the alternative range of profit-sharing contracts and also analyze the effect of product substitutability coefficient and network externalities on the alliance and profit-sharing contract. The results show that the vertical alliance contributes profit improvement to both the manufacturer and the retailer when the impact of network externalities on the product substitutability is not strong. However, vertical alliance will be out of operation when the effect of network externalities on the product substitutability is strong.