A Game Theory Approach To "new Retail":Improving The Revenue Sharing In A Supply Chain

Since the internet,artificial intelligence and big data gradually become mature technologies,consumers have already discovered multiple channels to satisfy the needs of individual consumption.Therefore,a great diversity of shopping scenarios emerges.Meanwhile,on the one hand,the brick-and-mortar retailers experience the tumbling profit due to the increasingly expensive rent and labor cost;on the other hand,the e-commercial retailers invest more capital and time to gain new consumers.Eventually,both the online and offline channels are willing and determined to terminate the costly confrontation and initiate mutual integration,which delivers a“New Retail” concept.This new pattern will revolutionize the ways of cooperation between suppliers and retailers.Because of the retailing industry changing from onefold channel to multi-channel even omnichannel,it is urgent to find out an appropriate method to improve and distribute the supply chain's total revenue.Initially,given the traditional single channel mode,there will be a leading supplier and a following retailer in the supply chain.This dissertation concentrates on the Stackelberg equilibrium to obtain the optimum wholesale price for the supplier and the retailer's optimum retailing price,which maximizes the total revenue of this traditional supply chain.Secondly,this paper changes the previous traditional single-channel mode to a multi-channel supply chain by adding a new retailer.In view of the characteristics of“New Retail”,all the retailers will adopt a unified retailing price.Thus,this article explores the impact on supply chain when introducing a new retailing channel.The research shows that not only a proportion of consumers are guided to the new channel but also the demand quantity is larger in the multi-channel mode,which suggests that the profit of this retailing supply chain be higher.Eventually,this dissertation identifies that the supply chain's profit under the Stackelberg competition is lower than the profit in collaboration.However,it is difficult for a cooperative game to distribute the profit properly.Hence,the Shapley value is applied to obtain a higher profit than the profit under the Stackelberg game,which achieves a win-win situation within the supply chain.