Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/61494
Title: Free riding and coordination in a dual-channel supply chain in e-commerce
Authors: Luo, M
Li, G
Cheng, TCE 
Keywords: Competition
Dual-channel
Free riding
Game theory
Showrooming
Supply chain coordination
Issue Date: 2016
Publisher: InterScience
Source: International journal of shipping and transport logistics, 2016, v. 8, no. 3, p. 223-249 How to cite?
Journal: International journal of shipping and transport logistics 
Abstract: In a dual-channel supply chain, the bricks-and-mortar retailer provides customers with pre-sales services, while the manufacturer adds a direct online channel to enjoy a free ride on the pre-sales services provided by the retailer. Based on consumer utility theory, we first examine the free riding effect on the drivers of each firm's strategy, market sales, profitability, and supply chain performance. We find that the manufacturer's free riding behaviour has both positive and negative effects under some conditions, and the existence of the direct online channel is not necessarily detrimental to the retailer due to a reduction in the wholesale price and an enlargement of the market coverage. We propose a three-part tariff transfer payment scheme based on the retailer's order quantity and service level as a supply chain coordination mechanism. The results show that service level is improved and the coordination mechanism can achieve dual-channel coordination under some conditions.
URI: http://hdl.handle.net/10397/61494
ISSN: 1756-6517
EISSN: 1756-6525
DOI: 10.1504/IJSTL.2016.076253
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