Choice Of Vertical Structure And Contract Of Competitive Supply Chain Under Network Externality

With the rapid development of economic globalization and the increasingly fierce market competition, the form of competition has been changing, the competition among enterprises is evolving to supply chain competition. Simultaneously, the rapid development of information technology and networks has promoted the development of the network economic with the network externality. The network externality is not limited to network economy, there is also network externality in the traditional economy. Under the network externality environment, operation mechanism of the competitive supply chain will be affected by the network externality factor. This dissertation will apply Game theory and network externality theory to explore the game equilibriums of the structure of the competitive supply chain under network externality, and the choice of contracts based on the performance improvement of the supply chain upstream and downstream enterprises. What is more, this dissertation will analyze the effect of the product competition coefficient and network externality on the choice of strucutre and game equilibriums of contracts. All these results can provide supports both on theory and practice to the companies which under network externality and supply chain competition environment.Firstly, this dissertation will identify the choice of the structure and contract of the competing supply chain when the final product has the network externality, and reveal the effect of network externality and the intensity of competition on the evolution path and dominant equilibrium of vertical structure and vertical contract. This contents are divided into two parts as follows: if the effect of network externality on the competition range is weak, integrated structure is dominant equilibrium, meanwhile vertical alliance and revenue sharing contract contribute revenue improvement to both the manufacturer and the retailer, and quantity discount contract contract contribute revenue improvement to the parers; If the effect of network externality on the competition range is strong, revenue sharing contract will be out of operation, and quantity discount contract can damage revenue to both the manufacturer and the retailer. If the network externality coefficient is strong and the effect of network externality on the competition range is strong, decentralized structure is dominant equilibrium, while revenue sharing contract and quantity discount contract will be out of operation.Secondly, when the market uncertainty is considered, this dissertation will identify the choice of the structure and contract of the competing supply chain when the final product has the network externality, and reveal the effect of network externality, the intensity of competition and market risk factors on the evolution path and dominant equilibrium of vertical structure and vertical contract. If the effect of network externality on the competition intensity is weak and market uncertainty fluctuates strongly, integrated structure is dominated equilibrium, meanwhile profit sharing contract contributes profit improvement to both the manufacturer and the retailer; the choice from supply chain is not influenceed by the market risk.Finally, based on network externality and technological innovation environment, this dissertation will identify the choice of the structure and contract of the competing supply chain when the final product has the network externality, and reveal the effect of network externality and the intensity of competition on the evolution path and dominant equilibrium of vertical structure and vertical contract. The results show that when network externality coefficient and the quantity competition intensity are weak, profit sharing contract contributes profit improvement to both the manufacturer and the retailer in the absence of technology spillover effect. Integrated structure is dominant equilibrium when the manufacturers choose innovation technology with spillover to reduce production costs for processing products.