Research On The Welfare Effects Of The Retail Industry Based On Horizontal Games And Vertical Forces

With the development of the Internet economy,the sales model of the retail industry has undergone rapid changes.The online and offline sales channels have gradually evolved from the initial fierce competition.In 2017,Alibaba and Bai Lian Group carried out strategic cooperation,marking the strong alliance between China's largest online retailers and physical retailers to jointly create “new retail”.In the past two years,with the promotion of consumption as the background,relying on big data and cloud computing,the “new retail” model of online and offline construction,high-speed logistics and upgrade channel development has enabled a horizontal game between physical retailers and online retailers.The trend is gradually moving towards conspiracy,and the cooperation between the two sides has also led to an increase in the vertical power of retailers within the supply chain.How this shift in model affects the benefits of suppliers,retailers and consumers has become an important issue in the current retail industry.Therefore,this paper analyzes how retailer channel decision-making changes affect consumers,suppliers and their own welfare from two aspects: horizontal game and vertical power.This paper firstly reviews the development history and development status of China's retail industry,discusses the changes in retail organization relationship,and then builds the two stages of competition and collusion between physical retailers and online retailers.Manufacturers and retailers The Starkberg game model between the online store and the physical store,respectively,examines the impact of different horizontal game behaviors among retailers on themselves,manufacturers,consumer welfare and social welfare.Furthermore,the changes of the vertical forces of the retailers in these two stages are studied.The minimum and maximum ceilings of social welfare losses at this stage are calculated by the model.The horizontal game of retailers and the influence of vertical forces on the welfare of retail supply chain are discussed.Finally,based on the background and situation of real retail development,the paper analyzes the data of listed companies in retail industry by double differential(DID)and propensity value matching(PSM),and studies the impact of physical retailers on online sales.The study draws the following conclusions: First,with the development of the retail industry,the vertical power of the retail industry is declining.The cooperation between online stores and physical stores reduces the loss of unnecessary welfare in the retail industry and the welfare of the entire retail supply chain.Improved;second,empirical results indicate that physical retailers can improve social welfare by conducting online retail.