Strategic wholesale pricing in a supply chain with a potential entrant

摘要: This paper develops an adverse selection model for a two-stage supply chain with one supplier, retailer, and potential outside entrant supplier who makes partially substitutable product. The work is different from most research on entry deterrence that only considers single-stage model. Our main interest to investigate how the incumbent can strategically maximize her profit by wholesale pricing policy when facing entrant. We focus where will sell product through same retailer. derive optimal decisions each player study comparative statics of equilibrium. To structure may affect strategy we also consider three alternative models channel structures, both suppliers their products directly, has another independent sells directly. Through comparison, find existence common downstream retailer often enhances deterring motivation supplier.