Game Analysis of Price Competition between Three Echelon Supply Chains

Abstract

Aiming at the new problem of price competition between three echelon supply chains, this paper quantitatively analyzes the reasons for the low price competition under the ten decision-making forms under the framework of the Bertrand game, and then one of the supply chains is differentiated by providing value-added services, thus reducing the impact of price competition on them. It also deduces whether the critical point of differential investment is to be differentiated, and compares the value increment of the ten decision forms. The conclusion is: when the product differentiation is the same, the value of the supply chain of value-added services depends on the decision form of the other chain, and the decentralized decision making is the best form of decision. In particular, when the degree of alienation is relatively large, the difference between the value of three differentiated investment critical points is 2 times.