Research On Decision-making Of Dual Channel Supply Chains Considering Overconfidence

With the rapid development of e-commerce and mobile e-commerce,many enterprises with indirect channels have opened direct sales channels and formed their own dual channel sales system,which makes manufacturers and retailers coexist from vertical cooperation between upstream and downstream to horizontal competition and vertical cooperation.The opening of direct selling channels directly affects the pricing and inventory decision-making of upstream and downstream enterprises in the supply chain.At the same time,the uncertainty of market demand and the irrational behavior of decision-makers make the results of who gains and who loses in the supply chain members uncertain.Therefore,under the background of random market demand,this paper considers the impact of overconfidence behavior of upstream and downstream enterprises in dual channel supply chain on enterprise pricing decision,inventory decision and performance.Firstly,under the background of random indirect channel demand,the influence of retailer overconfidence on the decision-making of upstream and downstream enterprises in the supply chain is considered.In this paper,random demand is divided into additive random demand and multiplicative random demand.Stackelberg complete information dynamic game model is established under the conditions of retailer rationality and retailer overconfidence under additive demand mode and retailer rationality and retailer overconfidence under multiplicative demand mode respectively.The influence of retailer overconfidence behavior on pricing decision,retailer ordering decision and performance of upstream and downstream enterprises in supply chain is analyzed.It is found that under the additive demand model,the order quantity of retailers is closely related to their overconfidence,while the pricing of upstream and downstream enterprises in the supply chain is not related to the overconfidence of retailers;The overconfidence of retailers always has a positive impact on their expected profits and a negative impact on their actual profits;However,retailer overconfidence has no effect on the manufacturer’s expected profit,and the impact on the manufacturer’s actual profit depends on the critical value and the degree of overconfidence.Under the multiplicative demand model,the pricing of upstream and downstream enterprises and the order quantity of downstream enterprises in the supply chain are closely related to the degree of overconfidence of retailers,which depends on different preconditions;The influence direction of retailer overconfidence on its expected profit and actual profit is consistent with the result under the additive demand mode,while the influence degree of retailer overconfidence on manufacturer’s expected profit,actual profit and the difference between them all depends on different critical values.Secondly,under the background of random demand in both channels,the impact of spillover effect and overconfidence on the decision-making and performance of upstream and downstream enterprises in the supply chain is considered at the same time.This paper analyzes the impact of the overconfidence behavior of the upstream and downstream subjects of the supply chain on enterprise inventory decision-making,promotion decision-making and performance by constructing four situations: complete rationality of the upstream and downstream of the supply chain,overconfidence of the upstream and downstream,overconfidence of the downstream rationality,overconfidence of the upstream rationality,overconfidence of the downstream rationality,overconfidence of the upstream rationality,overconfidence of the upstream rationality,overconfidence of the downstream and overconfidence of both the upstream and downstream.At the same time,the spillover.It is found that the retailer’s order quantity and promotion effort are negatively correlated with the spillover effect,while the relationship between the manufacturer’s online production and the spillover effect depends on the size of the spillover effect;Spillover effect is always negative for retailers’ expected profits and actual profits,while the impact on manufacturers’ expected profits and actual profits depends on the size of spillover effect.As for overconfidence,the degree of overconfidence of retailers is positively correlated with the level of promotion efforts of retailers and manufacturers’ online production,while the relationship with their own order quantity depends on different conditions;The influence of retailer overconfidence on its own expected profit is always positive,and the influence on its own actual profit is always negative.For the manufacturer,the expected profit and actual profit depend on different conditions;Manufacturers’ overconfidence only affects their own production,which has nothing to do with retailers;Manufacturers’ overconfidence always has a positive impact on their expected profits and a negative impact on their actual profits,but has no impact on retailers’ performance.