Online retail offers unparalleled convenience but also increases consumers' exposure to counterfeit products. This study investigates how an e-commerce platform's store-brand introduction strategy can deter counterfeit sales when a retailer sells both genuine products and deceptive counterfeits. We find that the effectiveness of this strategy depends on the authentic product's unit production cost and the store-brand product's quality. Without a store-brand product, the retailer is incentivized to sell counterfeits when the authentic product's production cost is high. When a store-brand product is introduced, this incentive persists only if the store-brand product is of low quality and the authentic product's cost remains high. However, the platform may not always introduce a store-brand product even when it effectively deters counterfeits, as intensified competition can offset potential profit gains. We find that launching a store-brand product is optimal for the platform when the manufacturer's production cost is sufficiently high. Interestingly, the retailer's total demand can increase in some cases despite facing store-brand competition. This study is among the first to conceptualise platform store-brand introduction as a proactive anti-counterfeiting mechanism, showing how it deters deceptive counterfeits by altering the retailer's incentives ex ante rather than relying solely on post hoc enforcement.
The rapid adoption of algorithmic pricing by retailers, enabled by big data analytics, is reshaping decisions in supply chains and affecting consumer surplus. We develop a game-theoretic model to examine how a retailer's operation under an algorithmic-pricing regime, compared with a uniform-pricing regime, influences the manufacturer's product quality and wholesale pricing decisions, as well as profits and consumer surplus. We uncover three key findings. First, algorithmic pricing affects product quality through two opposing effects: the demand segmentation effect, which encourages quality improvement by better matching products to heterogeneous consumers, and the profit compression effect, which discourages quality investment when the consumer distribution is highly skewed. Second, algorithmic pricing generates asymmetric profit impacts for supply chain members. While the retailer benefits more directly from pricing precision, both firms can benefit, particularly under a balanced mix of consumer types, through increased market coverage and reduced channel conflict. Third, when algorithmic reliability is high and consumer heterogeneity is moderate, algorithmic pricing can improve consumer surplus by aligning prices with willingness-to-pay and incentivizing higher quality. As reliability improves and the consumer distribution becomes more balanced, the system can achieve a tripartite win-win that benefits the manufacturer, the retailer, and consumers. These findings highlight the dual, condition-dependent role of algorithmic pricing as both a coordination tool and a qualityenhancement mechanism in supply chains. They also offer managerial implications for the strategic deployment of algorithmic pricing tools and inform policy debates on regulating algorithmdriven markets.
We study when a retailer should adopt blockchain authentication in a two-period market facing entry by a deceptive counterfeiter. Using a game-theoretic model, we solve a rational-expectations equilibrium via backward induction to quantify pricing, demand timing, and profit effects. Blockchain shifts consumers’ beliefs about authenticity and when they buy, so the profit effect is not one-way: gains in one period may be offset by losses in the other, depending on authentication cost and market conditions. Adoption is optimal either (i) at low cost, as a quality signal that protects second-period margins; or (ii) at moderately high cost, as a demand-shifting lever that pulls sales into the first period. Counterintuitively, a retailer may rationally forgo adoption even at zero cost when differentiation or pricing power is weak (e.g., high counterfeit quality or high acquisition costs for the authentic good), and adoption can raise counterfeit share if it induces aggressive low-price repositioning by fakes. These results challenge the view that traceability is universally beneficial and underscore the need to align blockchain adoption with consumer patience, counterfeit quality, and authentication costs. We conclude with actionable guidance for retailers and policymakers.
ABSTRACT This article develops a supply chain model with an upstream manufacturer and a downstream e‐platform to examine their strategic interactions. Specifically, we investigate the manufacturer's decision on whether to introduce a marketplace channel alongside an existing reselling channel on the e‐platform, and the e‐platform's strategy on whether to disclose or withhold product information to reduce consumer uncertainty regarding product valuation. Our findings show that the manufacturer chooses to introduce a marketplace channel when the informativeness level before the e‐platform's disclosure is low or when both the informativeness level and channel substitutability are high. Otherwise, the manufacturer prefers not to introduce the marketplace channel. The e‐platform is incentivized to disclose information when the informativeness level is high. Additionally, a comparison with the benchmark without consumer uncertainty shows that consumer uncertainty can reduce the manufacturer's incentive to introduce the marketplace channel in part of the parameter space, whereas marketplace‐channel introduction becomes more attractive when consumers fully understand their valuations and channel substitutability is sufficiently high. The e‐platform is also more likely to disclose information if the marketplace channel is not introduced. This research offers insights into market practices and provides practical guidance on the optimal selection of distribution channel strategies for manufacturers and information disclosure strategies for e‐platforms.
When a retailer outsources its private brand to a national brand firm, the retailer can leverage this relationship to promote its private brand product, which is referred to as brand spillover. Additionally, the retailer can provide detailed private brand information to alleviate consumers' uncertainty about their preference for the product. We build a game-theoretic model to examine the information disclosure and brand spillover strategies in the context where an e-commerce platform sells products of two brands: its private brand (weak-brand) and a national brand (strong-brand) supplied by a co-opetitive supplier. The e-commerce platform outsources its private brand's (weak-brand) manufacturing to the supplier. The equilibrium analysis shows that the platform's choice of optimal strategy profile depends on two effects: the Consumer-heterogenization effect and the Brand-homogenization effect. Information disclosure can trigger the Consumer-heterogenization effect mitigating the intensity of price competition between the supplier and the platform, while brand spillover can cause the Brand-homogenization effect, enabling the platform's private brand product to be more attractive. Both substitution and complementary relations are found between information disclosure and brand spillover depending on the cost efficiency. There exists a win-win outcome that both the platform and supplier can be better off from information disclosure and brand spillover, therefore, these strategies can serve as effective tools for supply chain coordination.
Aiming at the problem that aviation spare parts inventory management is difficult to dynamically respond to demand fluctuations and lack of multi-airport reserve layout optimization, this paper proposes a data-driven three-stage framework: Firstly, we establish the consumption rule of spare parts. Secondly, the Deep Q-Network (DQN) was used to construct a multi-warehouse dynamic inventory optimization. Finally, the aviation spare parts demand under the condition of multiple airports was solved, and the spare parts reserve amount of each airport was reasonably allocated. The results show that the proposed framework has high prediction accuracy, supports adaptive spare parts inventory optimization among multiple airports, and lays a foundation for the application of dynamic optimization and predictive maintenance fusion technology for aviation equipment.
When a weak brand firm outsources its product from a strong brand firm, the weak brand firm can show this relationship to promote its product, which is referred to as brand spillover. At the same time, the platform can provide information that can alleviate consumers’ uncertainty about their preference for the product. We build a game-theoretic model to study the information revelation and brand spillover strategies in the context where an e-commerce platform sells products of two brands: weak brand firm and strong brand firm’s products. The weak brand firm outsources its product’s manufacturing to the strong brand firm. The equilibrium analysis shows that the weak brand firm always prefers to use brand spillover and the platform prefers to reveal preference information when the ratio of the two products’ cost-quality efficiencies is low.
Different from traditional age-related metrics, urgency of information (UoI) is a metric to characterize the estimation inaccuracy under time-varying context importance of the status information. This paper considers optimizing the UoI for a single-user scenario under stochastic energy harvesting. We formulate such a problem as a Markov decision process (MDP), based on which an optimal pure policy can be computed using the value iteration algorithm. Furthermore, we prove a structural property of an optimal pure policy for the state of estimation error. Simulation results verify our analytical findings and demonstrate the UoI advantage over other schemes.
E-commerce platforms (EPs) commonly provide information services. This study explores an EP’s information service strategy and an original equipment manufacturer’s (OEM) quality strategy in a supply chain. The OEM outsources production to a competing contract manufacturer (CM), and both the OEM and the CM sell their products through the platform, paying a preset commission. The EP decides whether to provide information on consumer quality preferences to the two manufacturers, incurring an associated cost. The OEM needs to determine its product quality strategy by strategically setting the optimal quality level relative to the CM’s product. By developing a game-theoretical model, we derive the optimal information service strategy for the EP and the quality strategy for the OEM. Our findings show that the platform prefers to provide the information services when the CM’s product has a low cost-quality ratio or when obtaining the information is inexpensive. In addition, the OEM opts for lower product quality relative to the CM’s product when the cost-quality ratio is high. We identify two effects of the EP’s information service: increasing product quality investment (quality-discrimination effect) and intensifying competition (competition-intensification effect) driven by price adjustments. These effects significantly impact the OEM’s quality strategy when consumers have low-quality preferences, leading to reduced quality and selling price when the cost-quality ratio of the CM’s product is low. Interestingly, these effects may conflict, inducing the OEM to increase both quality and selling price when this ratio is relatively high. Our study provides valuable managerial insights, suggesting that EPs should provide the information service when the CM’s product has a low cost-quality ratio or when obtaining consumer quality preferences is inexpensive. OEMs should strategically adjust their product quality relative to the CM’s product, especially when targeting consumers with low quality preferences. Extensions confirms the robustness of the major results derived from our main model.
Our study explores a firm that reduces its carbon footprint of products in the presence of heterogeneous consumers under cap-and-trade policy. The market comprises two consumer segments, namely eco-conscious and non-eco-conscious consumers. The former considers the product's carbon footprint when making purchasing decisions, while the latter does not. Additionally, each consumer segment exhibits heterogeneous product valuations, so the market is dual-heterogeneous. Under the cap-and-trade policy, the firm reduces its carbon footprint using two strategies. It invests in emission-reduction investment (ERI) or purchases carbon offsets (CO) in the carbon market to satisfy its emissions quota. Our findings show that the firm should not always use just one of these emission-reduction strategies but can use them simultaneously. Our findings also reveal that, regardless of whether consumer valuation and environmental preference are negatively or positively correlated, the firm adopts the ERI strategy when the initial emissions intensity per product is low. When the initial emissions intensity per product is high, the firm also chooses the ERI strategy if the gap between the initial emissions intensity per product and the per-unit quota of carbon emissions is small. However, if this gap is large, the firm may choose either the CO strategy or the ERI strategy. Our results further indicate that the firm's equilibrium profit first decreases and then increases as the ERI cost coefficient (i.e., emission-reduction investment cost coefficient in low-carbon technology) increases, which is not entirely consistent with the intuition that the firm's profit decreases as its corresponding cost increases. Conventional wisdom suggests that the firm should not invest in advanced technology to reduce carbon emissions when all targeted consumers are non-eco-conscious. However, our findings indicate that the firm's equilibrium emission-reduction intensity consistently remains above zero.
Nowadays, globalization and decarbonization have emerged as new normals for supply chains worldwide. In this paper, we investigate remanufacturing strategies within a global supply chain, aiming to provide managerial insights through the research to assist businesses in better integrating into the new normals. Within the global supply chain, an original equipment manufacturer (OEM) located in the home country sells its products to a foreign country through a local retailer. To establish a closed-loop supply chain, the OEM faces two strategic choices, i.e., self-operating remanufacturing in its home country (Strategy A) or licensing remanufacturing to a local remanufacturer (LR) in the foreign country (Strategy B). Utilizing game-theoretical models, our study first explores the operational decisions regarding quantities and prices made by the OEM, the retailer, and the LR. The analysis reveals that a higher cost disparity between the new and remanufactured products or lower cross-border recycling costs for used products can potentially stimulate firms’ incentives for recycling and remanufacturing. Second, upon comparing the equilibrium profits under the two strategies, we demonstrate that lower cross-border recycling costs consistently encourage the OEM to opt for self-operating remanufacturing. Interestingly, we find that the impact of the production cost disparity on the OEM’s strategic choice is non-monotonic; that is, either a low or high disparity of cost can incentivize the OEM to choose licensing remanufacturing, whereas a moderate cost disparity leads to self-operating remanufacturing. We also explored the impact of remanufacturing strategies on sustainability. Furthermore, we have examined governmental preferences regarding firms’ adoption of remanufacturing strategies. Our findings indicate that both countries can benefit from the OEM’s self-operating remanufacturing, providing an explanation as to why cross-border recycling and remanufacturing are not entirely prohibited by governments worldwide.
This paper examines the interplay between the information strategy of an e-commerce platform and the selling mode strategy of a manufacturer within a co-opetitive supply chain, as well as the identification of the optimal supply chain strategy. We develop a supply chain model where a platform outsources production of its private label product to a manufacturer, who also sells its national brand product through the platform. The platform must decide whether to acquire consumer quality preference information at a cost and share it with the manufacturer, while the manufacturer needs to choose between the reselling mode or the agency selling mode for its national brand product. The two driving effects (competition-intensification effect and mode differentiation effect) are identified. Our findings show that the platform will acquire and share information when the acquisition cost is sufficiently low, leading to the "competition-intensification effect." Additionally, the manufacturer prefers the agency selling mode when cost-quality efficiency is low, and the reselling mode otherwise, driven by the "mode differentiation effect." In cases where information sharing is absent, the manufacturer is more likely to choose the agency selling mode. Interestingly, when the cost-quality efficiency of the manufacturer's product is moderate and the information acquisition cost is low, the "competition-intensification effect" and the "mode differentiation effect" offset each other, resulting in the expansion of the region where the manufacturer chooses the reselling mode due to the platform's information-sharing strategy. As a result, this enhances a cooperative relationship between the manufacturer and the platform. We also derive the optimal supply chain strategy, providing insights into both the manufacturer's selling mode and the platform's information strategies in online retailing.
Given that the impact of consumers' environmental awareness and government subsidies on retailer sourcing has not been adequately examined in previous research, our study examines the impact of government subsidies on a retailer's low-carbon sourcing strategies. We define a parameter that characterizes the efficiency of government subsidies and build a game theoretical model that includes an ordinary supplier, a low-carbon supplier, and a retailer. The retailer's sourcing strategies include three options: only ordinary products (O), only low-carbon products (L), and both ordinary and low-carbon products (D). Our analysis shows the following results: First, when the retailer's environmental awareness exceeds a certain threshold, the retailer sources either low-carbon products or a combination of ordinary and low-carbon products. Otherwise, the retailer sources both ordinary and low-carbon products. Second, when the retailer's environmental awareness is relatively high, the government adopts a nonsubsidy policy regardless of the product's abatement level. However, when the retailer's environmental awareness is relatively low, the government's policy depends on the abatement level of the product: It provides a subsidy if the abatement level is low and no subsidy if the abatement level is high. Third, government subsidies to the retailer are not always an effective means of increasing social welfare. Our results have important implications for the design of effective government subsidy policies.
The evolution of tax exemption policies and consumer preferences for low-carbon products affect firms’ optimal pricing strategy selection in a competitive duopoly market. In our study, we build a two-period pricing model to examine the pricing strategy choices between low-carbon and traditional firms. Low-carbon firms offer consumers greater value, improving their overall experience and satisfaction. Given the evolution of government policies from tax exemption to taxation for low-carbon products, we divide the changes in carbon tax into two periods. Since each firm can choose either the uniform pricing strategy (setting the same price in both periods) or the tiered pricing strategy (setting different prices for two periods), four scenarios may occur. Conventional wisdom suggests that a firm’s pricing increases should result in a reduction in consumer demand. Interestingly, our results show that as traditional firm raises prices, consumer demand for traditional products could increase simultaneously in the second period. In such a case, the low-carbon firm selects the uniform pricing strategy and the traditional firm chooses the tiered pricing strategy. Moreover, as tax exemption policies evolve in duopoly markets, the cancellation of the tax exemption policy may intensify competition between traditional and low-carbon firms under certain conditions. Furthermore, given one firm’s pricing strategy, our results show that the other firm could adopt either a uniform pricing strategy or a tiered pricing strategy, which depends on the low-carbon advantage and tax rate.
This paper investigates a government's subsidy strategy for motivating a manufacturer to set up a flexible production line for emergency supplies. Four subsidy strategies are proposed to ensure a desired service level in case of an emergency: zero subsidy, a fixed subsidy, a marginal subsidy, and a hybrid subsidy. We develop a game theoretical model to examine how the government can induce a manufacturer to set up a flexible production line that can respond promptly to an emergency, based on the manufacturer's cost structure (fixed and marginal costs). We find that when the marginal profit of an emergency product is higher than that of the manufacturer's regular product, a fixed (marginal) subsidy is the dominant strategy if the manufacturer's fixed (marginal) cost is high, while a hybrid subsidy strategy is dominant if both costs are high. When the marginal profit of an emergency product is lower than that of the manufacturer's regular product, neither a fixed subsidy nor a zero subsidy will be the dominant strategy. We also find that a marginal subsidy can ensure the effectiveness of the strategy, while a fixed subsidy helps improve strategy efficiency. We use government subsidy strategies implemented for Chinese COVID-19 emergency supplies as examples to demonstrate the effectiveness and efficiency of the subsidy strategies under the proposed framework. We also extend the discussion by considering the manufacturer's social consciousness.
We investigate the strategies of an e-commerce platform (EP), selecting a supplier for its store brand and determining whether to provide information that can reduce consumers’ uncertainty about their quality preferences. The EP can choose either a non-competing outside supplier or a competing inside supplier that sells a high-quality brand product through the EP. Consumers have complete knowledge about the qualities of the two products, although they remain uncertain about which product best meets their need. We find that the EP has an incentive to disclose information when the ratio of the cost per unit quality of the inside supplier's product relative to that of the EP's own-brand product is high, and it prefers the inside supplier when this ratio is low. We identify the EP's optimal strategy profile. Specifically, when this ratio is low, the EP selects the inside supplier and refrains from disclosing information when the ratio is sufficiently low. However, when the ratio is high, the EP selects the outside supplier and discloses information only if the ratio is sufficiently high. We also find that market competition softens both when the EP selects the inside supplier and when it discloses information.
As environmental consciousness among consumers grows, firms are recognizing the importance of adopting carbon abatement technology as a crucial strategy to meet the rising demand for low-carbon products. Our study specifically examines the influence of a low-carbon investment strategy on a firm’s product line design, aiming to better align with consumer needs. Considering the impact of low-carbon investments and consumer environmental concern on the product line design has not been adequately examined in previous research. To fill this gap in research, our study proposes a model of a firm that designs the product line while determining the price and quality of each product. Our findings indicate that the single-product strategy is strictly inferior to the product line strategy when considering the low-carbon investment. This implies that the conventional wisdom that either the single-product strategy or the product line strategy could be an equilibrium strategy does not hold. Intuitively, the firm’s low-carbon investment in a specific product segment solely impacts the corresponding segment’s product quality and pricing decisions. While this intuition holds for the low-carbon investment strategy solely targeting high-end products, it does not apply when the low-carbon investment strategy applies solely to low-end products. Furthermore, our results show that the firm adopts the low-carbon investment strategy and traditional (without low-carbon investment) strategy when consumer environmental concern is relatively high and low, respectively. Finally, our results show that any of the four strategies (the traditional strategy and the low-carbon investment strategies for only low-end products, only high-end products, and both segments) could be optimal, depending on certain conditions, in the product line scenario.
We investigate whether and when a retailer who sells two quality differentiated products supplied by two manufacturers should reveal product fit information to help consumers find a product that better fits their needs. We show that the retailer’s optimal information strategy depends on the consumer’s unit misfit cost and production efficiencies of both manufacturers. The retailer should reveal product fit information when the ratio of the efficiencies of the two manufacturers is sufficiently low, or the consumer’s unit misfit cost is sufficiently high. The retailer is less likely to benefit from revealing product fit information when the consumer’s unit misfit cost is either low or very high. Two mechanisms, margin-enhancing (driving the efficient manufacturer to reduce the wholesale price) and market-targeting (setting higher retail prices for both products), that the retailer can benefit from revealing product fit information are discussed, and the associated conditions are identified. Our findings suggest that the inefficient manufacturer is always better off when the retailer reveals fit information, but the efficient manufacturer may suffer. A win-win-win for all supply chain members can be achieved under certain conditions.
In order to study the organizational structure design of the retailer’s financial and retail sectors under the conditions of manufacturer’s financial constraints and output uncertainty, this article is based on a two-party dynamic that includes manufacturers with uncertain output and large retailers that can provide financial support. Through the game model, the optimal contract design of the retailer under different organizational structures was obtained by solving the corresponding equilibrium results, and the optimal organizational structure design of the retailer was obtained by analyzing the corresponding equilibrium results. Departmental capital costs are decreasing monotonically. The result of analyzing the manufacturer's output uncertainty shows that the most favorable complete output probability for the retailer is lower than the manufacturer's optimal complete output probability. Extending the model to consider the existence of external financial institutions, the manufacturer's financing model selection plan was obtained. This research provides theoretical support and reference for the financing and operation decisions of retailers, manufacturers, and external financial institutions in the context of supply chain finance.
We investigate upstream coopetition and competition in a supply chain in the context of a highquality brand manufacturer's strategy on upstream outsourcing and e-commerce platform's strategy on downstream information disclosure. The high-quality brand manufacturer outsources production and sells through an e-commerce platform, where a low-quality manufacturer also sells. The high-quality manufacturer may outsource to a third manufacturer who produces only the brand manufacturer's high-quality product, maintaining a competition relationship with the low-quality manufacturer (competition strategy). The high-quality brand manufacturer also has the option to outsource to the low-quality manufacturer, entering into a coopetition relationship (coopetition strategy). The consumers have knowledge about the quality of the two products, but they are uncertain about their quality preference. That is, they are not sure which of the two quality-differentiated products available in the market will meet their own needs. Their uncertainty can be eliminated by the e-commerce platform's disclosure of preference-revealing information. We find that the brand manufacturer prefers the coopetition strategy when the ratio of the two products' cost-quality efficiencies is very low or moderate. The e-commerce platform has an incentive to disclose preference-revealing information when the ratio of the two products' cost-quality efficiencies is moderate or high. We show the optimal strategies of the supply chain with the brand manufacturer's outsourcing strategy and the platform's information disclosure strategy, and we also extend the discussion to the impacts of several related issues.
Bintong Chen (陈滨桐)合作论文数Western Business School of China, Southwestern University of Finance and Economics9