Research On Distribution Game Between E-platform And Physical Store Considering Online And Offline Integration,Pricing Power Structure And Fairness Concerns

In the era of network economy,the virtualization of trading mode has realized the extension of commercial tentacles,and human consumption space has expanded from traditional physical stores to electronic malls(e-platforms).For the rapid growth of the online shopping community,physical stores one after another have opened e-platforms to cater to the demands for online shopping.However,with the emergence of a large number of e-platforms in the online market,it has become “red ocean”with fierce competition,then there has been a return phenomenon of online shopping malls building physical stores offline.In order to capture the customers flow as much as possible and make full use of the differences and complementarities between the electronic channel and the physical channel,the online and offline integration is becoming an important consideration on the channel layout decisions of the e-platforms and the physical stores.This paper considers a parallel distribution network chain dominated by an e-platform and a physical store,focuses on the channel competition when online and offline integrated by one of the two parties or both.The article adopts multi-channel theory and fairness concern theory,considers three online and offline integrated scenarios such as e-platform unilaterally adopts dual-channel structure,the physical store unilaterally adopts dual-channel structure,and both parties adopt dual-channel structure.In addition,the paper considers three pricing power structures such as e-platform has dominant power,physical store has dominant power and each has equal power.Consequently,there are nine composite models under the three online and offline integrated scenarios and the three pricing power structures.Subsequently,considering the the fairness concerns of the physical store,the reverse order derivation method of Stackelberg sequential game is used to solve the equilibriums of the platform dominant model and the physical store dominant model,the static game method of the Nash game is used to solve the equilibriums of the equal power model.Then,we perform a sensitivity analysis of the relationship between equilibrium prices,equilibrium demands,equilibrium profits and the fairness concerns of the physical store under each model.Besides,the paper gives numerical analysis to compare the equilibrium prices and equilibrium profits of the three pricing power structures under a certain online and offline integrated scenario,and compare the equilibrium prices and equilibrium profits of the three online and offline integrated scenarios under a certain pricing power structure.Finally,based on numerical cases,the paper extracts some pricing strategies and channel operation strategies for both parties.By analyzing the sensitivity of the game equilibriums to the fairness concerns of the physical store,the following conclusions can be concluded.(1)The expression of fairness concerns by the physical store will probably prompt both sides to engage in a price war.When the e-platform unilaterally adopts dual-channel structure or the physical store unilaterally adopts dual-channel structure,regardless of the pricing power structure,as long as the physical store takes the behavior of fairness concerns,both sides will compete to adopt price reduction strategy,and the price war between the two sides will intensify with the deepening of the degree of fairness concerns.When the e-platform and the physical store both adopt dual-channel structure,the price war may disappear if both sides follow each other's pricing in new channel.However,in most cases,because of the unequal control of prices on both sides,it is easy to fall into price competition if the physical store expresses fairness concerns.(2)Fairness concerns expressed by the physical store can not reconcile the benefits of the two sides.When the e-platform unilaterally adopts dual-channel structure or the physical store unilaterally adopts dual-channel structure,whatever the pricing power structure,compared with fairness neutrality,both parties' profits are lower under the fairness concerns of the physical store.Moreover,the more the physical store pays attention to the income fairness,the greater the profits loss of both parties.When the e-platform and the physical store distribute goods across online and offline at the same time,under the three pricing power structures,the physical store adopts the fair pricing still can not improve either party's income(which may be equal to the profits under the fair neutrality).In short,different combinations of the dual-channel structure and the pricing power structure can not change the result that the fairness concerns of the physical store can not be used as the adjustment means for the optimization of both sides' benefit.Based on numerical examples,through the analysis of the equilibrium prices and equilibrium profits of both parties under different online and offline sales structures and different pricing power structures,the following pricing strategies and channel strategies are extracted.(1)Both the e-platform and the physical store are inclined to seek the dominant power of pricing.Under a certain dual-channel distribution structure,by comparing the equilibrium prices and equilibrium profits of both sides under three pricing power structures,it is found that both the e-platform and the physical store set the highest prices and have the highest profits when they dominate pricing.Therefore,both sides have the internal incentive to compete for the dominant pricing power.(2)Under a certain pricing power structure,by comparing the equilibrium prices and equilibrium profits of the two parties under three online and offline sales structures,we get the following enlightenment: When the pricing power of the e-platform and the physical store is not equal,both sides should actively implement online and offline sales,but when the other side has taken the dual-channel structure first,then the latter party should abandon dual-channel strategy.When the pricing power of the two parties is equal,both lack the incentive to sell online and offline,it would be better for both sides to maintain a single distribution channel.