Pricing Strategy For A Dominant Retailer In The Supply Chain Based On Game Theory Under Asymmetric Information

Supply chain coordination is an important part of the supply chain management research, whose achievement is mainly based on pricing strategies and information symmetric. However, enterprises in the supply chain belong to different economic entities, and there's always all kinds of information being asymmetric. Meanwhile, who be the dominant party when setting pricing strategies is also an important issue. Since the 1970th, with the development of technology and productivity, the competition between retailers is becoming more and more drastically, a lot of powerful international retail group appeared in the market. The position of the"master-slave"relationship in price negotiation in supply chain has transformed from the"supplier-led"to"the retailer-led". In this situation, how to use the pricing strategies to coordinate the benefits of the dominant retailers and their suppliers has become an important and realistic issue.Based on all of these realistic, this paper has studied the pricing strategies for the retailer who is the dominant enterprise in a two-echelon supply chain under asymmetric information, based on the Stackelberg game model and the statistical theory. This paper has studied the following issues:1. The optimal pricing strategy for the retailer who totally doesn't know the manufacturing cost of the manufacturer (called totally asymmetric information here after);2. The optimal pricing strategy for the retailer who knows the statistical probabilities of the manufacturing cost of the manufacturer based on historical transaction data (called partly asymmetric information here after);3. The influence and the apokalypsis of parameter fluctuations to the pricing strategies of the retailer in the partly asymmetric information situation.Within the scope studied, this paper has found the following results:There's a close relationship between the dominant retailer's optimal reicing strategies and the in formation of the manufacturer's marginal production cost:1. When this information is totally asymmetric, the retailer insists the pricing dominant power would drop all parties'(i.e. the supplier, the retailer, and the supply chain channel) benefits.2. When this information is partly asymmetric, the retailer will benefit more than the supplier, only if the profit margin of the channel is larger than a certain level.3. When this information is partly asymmetric, the retailer should adjust his marketing strategies, based on the maximum price accepted by the market: (1) when the maximum price accepted by the market is larger than a certain level, the retailer increasing the uncertainty of the statistical probabilities of the manufacturing cost of the manufacturer (known as the"coeffecient of variation") will improve the supplier and the consumer's benefits, while it doesn't affect the retailer's benefit; (2) when the maximum price accepted by the market is less than a certain level, the retailer increasing the uncertainty of the statistical probabilities of the manufacturing cost of the manufacturer (known as the"coeffecient of variation") will improve all parties'(i.e. the supplier, the retailer, and the consumer) benefits; (3) no matter how the maximum price accepted by the market is, the retailer should always pay effort to decrease the the price sensitivity coefficient of the market demand, and increase the maximum demand of the market; (4) when the the price sensitivity coefficient of the market demand is larger than a certain level, the retailer should eliminate the product; and (5) when the maximum demand of the market is less than a certain level, the retailer should eliminate the product, or else find other suppliers who can supply more products.