Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230473
Authors: 
Kittaka, Yuta
Year of Publication: 
2019
Series/Report no.: 
ISER Discussion Paper No. 1067
Abstract: 
We explore the manufacturer's incentives to use a dual-channel supply chain rather than only a direct or an indirect channel in simultaneous price competition. We first revisit the demand formulation widely used in the context of channel analysis and introduce a different demand formulation whose market size is constant with respect to the number of channels. We then show that when an entrant exists, a dualchannel strategy benefits the manufacturer because it weakens competition, even if the indirect channel is less efficient. Still, such a dual-channel strategy never benefits the manufacturer when there is no entrant.
Subjects: 
Direct distribution
Dual-channel supply chain
Channel conflicts
JEL: 
D43
L13
L22
M11
Document Type: 
Working Paper

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