American Institute of Mathematical Sciences

Advanced
March  2021, 17(2): 601-631. doi: 10.3934/jimo.2019125

Competition in a dual-channel supply chain considering duopolistic retailers with different behaviours

Hongxia Sun 1,, , Yao Wan 1, , Yu Li 2, , Linlin Zhang 1, and  Zhen Zhou 3,

1. 

Business School, Beijing Technology and Business University, Beijing 100048, China
2. 

State Grid Beijing Logistic Supply Company, State Grid Beijing Electric Power Company, Beijing 100054, China
3. 

School of Management, Capital Normal University, Beijing 100048, China

* Corresponding author: Hongxia Sun

Received  October 2018 Revised  May 2019 Published  March 2021 Early access  October 2019

We study competition in a dual-channel supply chain in which a single supplier sells a single product through its own direct channel and through two different duopolistic retailers. The two retailers have three competitive behaviour patterns: Cournot, Collusion and Stackelberg. Three models are respectively constructed for these patterns, and the optimal decisions for the three patterns are obtained. These optimal solutions are compared, and the effects of certain parameters on the optimal solutions are examined for the three patterns by considering two scenarios: a special case and a general case. In the special case, the equilibrium supply chain structures are analysed, and the optimal quantity and profit are compared for the three different competitive behaviours. Furthermore, both parametric and numerical analyses are presented, and some managerial insights are obtained. We find that in the special case, the Stackelberg game allows the supplier to earn the highest profit, the retailer playing the Collusion game makes the supplier earn the lowest profit, and the Stackelberg leader can gain a first-mover advantage as to the follower. In the general case, the supplier can achieve a higher profit by raising the maximum retail price or holding down the self-price sensitivity factor.

Keywords: Dual-channel supply chain, Cournot game, Stackelberg game, order quantity, retailing.
Mathematics Subject Classification: Primary: 90B50; Secondary: 91A10, 91A40.
Citation: Hongxia Sun, Yao Wan, Yu Li, Linlin Zhang, Zhen Zhou. Competition in a dual-channel supply chain considering duopolistic retailers with different behaviours. Journal of Industrial and Management Optimization, 2021, 17 (2) : 601-631. doi: 10.3934/jimo.2019125
References:
[1]

E. Adida and V. DeMiguel, Supply chain competition with multiple manufacturers and retailers, Oper. Res., 59 (2011), 156-172.  doi: 10.1287/opre.1100.0863.

[2]

S. Balasubramanian, Mail versus mall: A strategic analysis of competition between direct marketers and conventional retailers, Marketing Science, 17 (1998), 181-195.  doi: 10.1287/mksc.17.3.181.

[3]

E. Brynjolfsson, Y. Hu and M. Rahman, Battle of the retail channels: How product selection and geography drive cross-channel competition, Management Science, 55 (2009), 1755-1765.  doi: 10.1287/mnsc.1090.1062.

[4]

K. Chen and T. Xiao, Pricing and replenishment policies in a supply chain with competing retailers under different retail behaviors, Computers and Industrial Engineering, 103 (2017), 145-157.  doi: 10.1016/j.cie.2016.11.018.

[5]

W. Chiang, D. Chhajed and J. Hess, Direct marketing, indirect profits: A strategic analysis of dual-channel supply-chain design, Management Science, 49 (2003), 1-20.  doi: 10.1287/mnsc.49.1.1.12749.

[6]

A. David and E. Adida, Competition and coordination in a two-channel supply chain, Prod. and Oper. Management, 24 (2015), 1358-1370.  doi: 10.1111/poms.12327.

[7]

A. Dumrongsiri, M. Fan and A. Jain, et al., A supply chain model with direct and retail channels, European J. Oper. Res., 187 (2008), 691–718. doi: 10.1016/j.ejor.2006.05.044.

[8]

X. Han, H. Wu and Q. Yang, et al., Reverse channel selection under remanufacturing risks: Balancing profitability and robustness, International J. of Production Economics, 182 (2016), 63–72. doi: 10.1016/j.ijpe.2016.08.013.

[9]

H. Huang, H. Ke and L. Wang, Equilibrium analysis of pricing competition and cooperation in supply chain with one common manufacturer and duopoly retailers, International J. of Production Economics, 178 (2016), 12-21.  doi: 10.1016/j.ijpe.2016.04.022.

[10]

C. Ingene and M. Parry, Channel coordination when retailers compete, Marketing Science, 14 (1995), 360-377.  doi: 10.1287/mksc.14.4.360.

[11]

M. Lai, H. Yang and E. Cao, et al., Optimal decisions for a dual-channel supply chain under information asymmetry, J. Ind. Manag. Optim., 14 (2018), 1023–1040. doi: 10.3934/jimo.2017088.

[12]

N. Modak, S. Panda and S. Sana, Three-echelon supply chain coordination considering duopolistic retailers with perfect quality products, International J. of Production Economics, 182 (2016), 564-578.  doi: 10.1016/j.ijpe.2015.05.021.

[13]

I. Moon and X. Feng, Supply chain coordination with a single supplier and multiple retailers considering customer arrival times and route selection, Transportation Research Part E: Logistics and Transportation Review, 106 (2017), 78-97.  doi: 10.1016/j.tre.2017.08.004.

[14]

R. Sadeghi, A. Taleizadeh and F. Chan, et al., Coordinating and pricing decisions in two competitive reverse supply chains with different channel structures, International J. of Production Research, 57 (2019), 2601–2625. doi: 10.1080/00207543.2018.1551637.

[15]

A. Sadigh, S. Chaharsooghi and M. Sheikhmohammady, A game theoretic approach to coordination of pricing, advertising, and inventory decisions in a competitive supply chain, J. Ind. Manag. Optim., 12 (2016), 337-355. doi: 10.3934/jimo.2016.12.337.

[16]

A. Vinhas and E. Anderson, How potential conflict drives channel structure: Concurrent (direct and indirect) channels, Journal of Marketing Research, 42 (2005), 507-515.  doi: 10.1509/jmkr.2005.42.4.507.

[17]

L. Wang, H. Song and D. Zhang, et al., Pricing decisions for complementary products in a fuzzy dual-channel supply chain, J. Ind. Manag. Optim., 15 (2019), 343–364. doi: 10.3934/jimo.2018046.

[18]

S. Wang, J. Wang and Y. Zhou, Channel coordination with different competitive duopolistic retail behaviour and non-linear demand function, International J. of Manag. Science and Engineering Manag., 7 (2012), 119-127.  doi: 10.1080/17509653.2012.10671214.

[19]

S. Wang, Y. Zhou and J. Min, et al., Coordination of cooperative advertising models in a one-manufacturer two-retailer supply chain system, Computers and Industrial Engineering, 61 (2011), 1053–1071. doi: 10.1016/j.cie.2011.06.020.

[20]

W. Wang, G. Li and T. Cheng, Channel selection in a supply chain with a multi-channel retailer: The role of channel operating costs, International J. of Production Economics, 173 (2016), 54-65.  doi: 10.1016/j.ijpe.2015.12.004.

[21]

W. Wang, P. Zhang and J. Ding, et al., Closed-loop supply chain network equilibrium model with retailer-collection under legislation, J. Ind. Manag. Optim., 15 (2019), 199–219. doi: 10.3934/jimo.2018039.

[22]

D. Wu, B. Zhang and O. Baron, A trade credit model with asymmetric competing retailers, Production and Oper. Manag., 28 (2019), 206-231.  doi: 10.1111/poms.12882.

[23]

T. Xiao, T. Choi and T. Cheng, Product variety and channel structure strategy for a retailer-Stackelberg supply chain, European J. Oper. Res., 233 (2014), 114-124.  doi: 10.1016/j.ejor.2013.08.038.

[24]

G. Xu, B. Dan and X. Zhang, et al., Coordinating a dual-channel supply chain with riskaverse under a two-way revenue sharing contract, International J. of Production Economics, 147 (2014), 171–179. doi: 10.1016/j.ijpe.2013.09.012.

[25]

L. Yang, J. Ji and K. Chen, Advertising games on national brand and store brand in a dual-channel supply chain, J. Ind. Manag. Optim., 14 (2018), 105-134.  doi: 10.3934/jimo.2017039.

[26]

S. Yang and Y. Zhou, Two-echelon supply chain models: Considering duopolistic retailers' different competitive behaviors, International J. of Production Economics, 103 (2006), 104-116.  doi: 10.1016/j.ijpe.2005.06.001.

[27]

Z. Yao, S. Leung and K. Lai, Manufacturer's revenue-sharing contract and retail competition, European J. Oper. Res., 186 (2008), 637-651.  doi: 10.1016/j.ejor.2007.01.049.

show all references

References:
[1]

E. Adida and V. DeMiguel, Supply chain competition with multiple manufacturers and retailers, Oper. Res., 59 (2011), 156-172.  doi: 10.1287/opre.1100.0863.

[2]

S. Balasubramanian, Mail versus mall: A strategic analysis of competition between direct marketers and conventional retailers, Marketing Science, 17 (1998), 181-195.  doi: 10.1287/mksc.17.3.181.

[3]

E. Brynjolfsson, Y. Hu and M. Rahman, Battle of the retail channels: How product selection and geography drive cross-channel competition, Management Science, 55 (2009), 1755-1765.  doi: 10.1287/mnsc.1090.1062.

[4]

K. Chen and T. Xiao, Pricing and replenishment policies in a supply chain with competing retailers under different retail behaviors, Computers and Industrial Engineering, 103 (2017), 145-157.  doi: 10.1016/j.cie.2016.11.018.

[5]

W. Chiang, D. Chhajed and J. Hess, Direct marketing, indirect profits: A strategic analysis of dual-channel supply-chain design, Management Science, 49 (2003), 1-20.  doi: 10.1287/mnsc.49.1.1.12749.

[6]

A. David and E. Adida, Competition and coordination in a two-channel supply chain, Prod. and Oper. Management, 24 (2015), 1358-1370.  doi: 10.1111/poms.12327.

[7]

A. Dumrongsiri, M. Fan and A. Jain, et al., A supply chain model with direct and retail channels, European J. Oper. Res., 187 (2008), 691–718. doi: 10.1016/j.ejor.2006.05.044.

[8]

X. Han, H. Wu and Q. Yang, et al., Reverse channel selection under remanufacturing risks: Balancing profitability and robustness, International J. of Production Economics, 182 (2016), 63–72. doi: 10.1016/j.ijpe.2016.08.013.

[9]

H. Huang, H. Ke and L. Wang, Equilibrium analysis of pricing competition and cooperation in supply chain with one common manufacturer and duopoly retailers, International J. of Production Economics, 178 (2016), 12-21.  doi: 10.1016/j.ijpe.2016.04.022.

[10]

C. Ingene and M. Parry, Channel coordination when retailers compete, Marketing Science, 14 (1995), 360-377.  doi: 10.1287/mksc.14.4.360.

[11]

M. Lai, H. Yang and E. Cao, et al., Optimal decisions for a dual-channel supply chain under information asymmetry, J. Ind. Manag. Optim., 14 (2018), 1023–1040. doi: 10.3934/jimo.2017088.

[12]

N. Modak, S. Panda and S. Sana, Three-echelon supply chain coordination considering duopolistic retailers with perfect quality products, International J. of Production Economics, 182 (2016), 564-578.  doi: 10.1016/j.ijpe.2015.05.021.

[13]

I. Moon and X. Feng, Supply chain coordination with a single supplier and multiple retailers considering customer arrival times and route selection, Transportation Research Part E: Logistics and Transportation Review, 106 (2017), 78-97.  doi: 10.1016/j.tre.2017.08.004.

[14]

R. Sadeghi, A. Taleizadeh and F. Chan, et al., Coordinating and pricing decisions in two competitive reverse supply chains with different channel structures, International J. of Production Research, 57 (2019), 2601–2625. doi: 10.1080/00207543.2018.1551637.

[15]

A. Sadigh, S. Chaharsooghi and M. Sheikhmohammady, A game theoretic approach to coordination of pricing, advertising, and inventory decisions in a competitive supply chain, J. Ind. Manag. Optim., 12 (2016), 337-355. doi: 10.3934/jimo.2016.12.337.

[16]

A. Vinhas and E. Anderson, How potential conflict drives channel structure: Concurrent (direct and indirect) channels, Journal of Marketing Research, 42 (2005), 507-515.  doi: 10.1509/jmkr.2005.42.4.507.

[17]

L. Wang, H. Song and D. Zhang, et al., Pricing decisions for complementary products in a fuzzy dual-channel supply chain, J. Ind. Manag. Optim., 15 (2019), 343–364. doi: 10.3934/jimo.2018046.

[18]

S. Wang, J. Wang and Y. Zhou, Channel coordination with different competitive duopolistic retail behaviour and non-linear demand function, International J. of Manag. Science and Engineering Manag., 7 (2012), 119-127.  doi: 10.1080/17509653.2012.10671214.

[19]

S. Wang, Y. Zhou and J. Min, et al., Coordination of cooperative advertising models in a one-manufacturer two-retailer supply chain system, Computers and Industrial Engineering, 61 (2011), 1053–1071. doi: 10.1016/j.cie.2011.06.020.

[20]

W. Wang, G. Li and T. Cheng, Channel selection in a supply chain with a multi-channel retailer: The role of channel operating costs, International J. of Production Economics, 173 (2016), 54-65.  doi: 10.1016/j.ijpe.2015.12.004.

[21]

W. Wang, P. Zhang and J. Ding, et al., Closed-loop supply chain network equilibrium model with retailer-collection under legislation, J. Ind. Manag. Optim., 15 (2019), 199–219. doi: 10.3934/jimo.2018039.

[22]

D. Wu, B. Zhang and O. Baron, A trade credit model with asymmetric competing retailers, Production and Oper. Manag., 28 (2019), 206-231.  doi: 10.1111/poms.12882.

[23]

T. Xiao, T. Choi and T. Cheng, Product variety and channel structure strategy for a retailer-Stackelberg supply chain, European J. Oper. Res., 233 (2014), 114-124.  doi: 10.1016/j.ejor.2013.08.038.

[24]

G. Xu, B. Dan and X. Zhang, et al., Coordinating a dual-channel supply chain with riskaverse under a two-way revenue sharing contract, International J. of Production Economics, 147 (2014), 171–179. doi: 10.1016/j.ijpe.2013.09.012.

[25]

L. Yang, J. Ji and K. Chen, Advertising games on national brand and store brand in a dual-channel supply chain, J. Ind. Manag. Optim., 14 (2018), 105-134.  doi: 10.3934/jimo.2017039.

[26]

S. Yang and Y. Zhou, Two-echelon supply chain models: Considering duopolistic retailers' different competitive behaviors, International J. of Production Economics, 103 (2006), 104-116.  doi: 10.1016/j.ijpe.2005.06.001.

[27]

Z. Yao, S. Leung and K. Lai, Manufacturer's revenue-sharing contract and retail competition, European J. Oper. Res., 186 (2008), 637-651.  doi: 10.1016/j.ejor.2007.01.049.

Figure 1.  Supply chain structure
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Figure 2.  Effect of $a_k$ on $\Pi_0$ and ($\Pi_1$-$\Pi_2$) in three patterns
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Figure 3.  Effect of $\theta_k$ on $q_0$ and $ \Pi_0$ in three patterns
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Figure 4.  Effect of $\theta_k$ on $q_1$ and $\Pi_1$ in three patterns
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Figure 5.  Effect of $\theta_k$ on $q_2$ and $\Pi_2$ in three patterns
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Figure 6.  Effect of $\theta_k$ or $\beta$ on ($\Pi_1$-$\Pi_2$) in three patterns
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Figure 7.  Effect of $\beta$ on $q_k$ or $\Pi_k$ in three patterns
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Table 1.  The equilibrium supply chain structure about the three different competitive behaviors
Structure Wholesale supplier Dual-channel Monopoly retailer
Cournot $ \delta\leq\frac{2\beta}{2\theta+\beta} $ $ \frac{2\beta}{2\theta+\beta}<\delta<\frac{\theta_0}{\beta} $ $ \delta\geq\frac{\theta_0}{\beta} $
$ q^{co}_0 $ - $ \frac{2\beta(a-c)-a_0(2\theta+\beta)}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ $ \frac{a_0}{2\theta_0} $
$ q^{co}_1 $ $ \frac{a-c}{2(2\theta+\beta)} $ $ \frac{V}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ -
$ q^{co}_2 $ $ \frac{a-c}{2(2\theta+\beta)} $ $ \frac{V}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ -
$ w^{co} $ $ \frac{a+c}{2} $ $ \frac{a+c}{2} $ -
$ p_0^{co} $ - $ \frac{a_0}{2} $ $ \frac{a_0}{2} $
$ p_1^{co} $ $ \frac{(a+c)(\theta+\beta)+2a\theta}{2(2\theta+\beta)} $ $ \frac{a+c}{2}+\frac{V\theta}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ -
$ p_2^{co} $ $ \frac{(a+c)(\theta+\beta)+2a\theta}{2(2\theta+\beta)} $ $ \frac{a+c}{2}+\frac{V\theta}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ -
$ \Pi_0^{co} $ $ \frac{(a-c)^2}{2(2\theta+\beta)} $ $ \frac{2(a-c)(a_0\beta+V)-a_0^2(2\theta+\beta)}{4[2\beta^2-\theta_0(2\theta+\beta)]} $ $ \frac{a_0^2}{4\theta_0} $
$ \Pi_{1}^{co} $ $ \frac{\theta(a-c)^2}{4(2\theta+\beta)^2} $ $ \frac{\theta V^2}{4[2\beta^2-\theta_0(2\theta+\beta)]^2} $ -
$ \Pi_{2}^{co} $ $ \frac{\theta(a-c)^2}{4(2\theta+\beta)^2} $ $ \frac{\theta V^2}{4[2\beta^2-\theta_0(2\theta+\beta)]^2} $ -
Collusion $ \delta\leq\frac{\beta}{\theta+\beta} $ $ \frac{\beta}{\theta+\beta}<\delta<\frac{\theta_0}{\beta} $ $ \delta\geq\frac{\theta_0}{\beta} $
$ q^{cn}_0 $ - $ \frac{a_0(\theta+\beta)-\beta(a-c)}{2[\theta_0(\theta+\beta)-\beta^2]} $ $ \frac{a_0}{2\theta_0} $
$ q^{cn}_1 $ $ \frac{a-c}{4(\theta+\beta)} $ $ \frac{V}{4[\beta^2-\theta_0(\theta+\beta)]} $ -
$ q^{cn}_2 $ $ \frac{a-c}{4(\theta+\beta)} $ $ \frac{V}{4[\beta^2-\theta_0(\theta+\beta)]} $ -
$ w^{cn} $ $ \frac{a+c}{2} $ $ \frac{a+c}{2} $ -
$ p_0^{cn} $ - $ \frac{a_0}{2} $ $ \frac{a_0}{2} $
$ p_1^{cn} $ $ \frac{3a+c}{4} $ $ \frac{a+c}{2}+\frac{(\theta+\beta)V}{4[\beta^2-\theta_0(\theta+\beta)]} $ -
$ p_2^{cn} $ $ \frac{3a+c}{4} $ $ \frac{a+c}{2}+\frac{(\theta+\beta)V}{4[\beta^2-\theta_0(\theta+\beta)]} $ -
$ \Pi_0^{cn} $ $ \frac{(a-c)^2}{4(\theta+\beta)} $ $ \frac{(a-c)(V+a_0\beta)-a_0^2(\theta+\beta)}{4[\beta^2-\theta_0(\theta+\beta)]} $ $ \frac{a_0^2}{4\theta_0} $
$ \Pi_{1}^{cn} $ $ \frac{(a-c)^2}{16(\theta+\beta)} $ $ \frac{V^2(\theta+\beta)}{16[\beta^2-\theta_0(\theta+\beta)]^2} $ -
$ \Pi_{2}^{cn} $ $ \frac{(a-c)^2}{16(\theta+\beta)} $ $ \frac{V^2(\theta+\beta)}{16[\beta^2-\theta_0(\theta+\beta)]^2} $ -
Stackelberg $ \delta\leq\frac{\beta U}{T} $ $ \frac{\beta U}{T}<\delta<\frac{\theta_0}{\beta} $ $ \delta\geq\frac{\theta_0}{\beta} $
$ q^{st}_0 $ - $ \frac{\beta U(a-c)-a_0T}{2(\beta^2 U-\theta_0T)} $ $ \frac{a_0}{2\theta_0} $
$ q^{st}_1 $ $ \frac{\theta(a-c)(2\theta-\beta)}{T} $ $ \frac{\theta V(2\theta-\beta)}{\beta^2 U-\theta_0T} $ -
$ q^{st}_2 $ $ \frac{(a-c)(4\theta^2-\beta^2-2\theta\beta)}{2T} $ $ \frac{V(4\theta^2-\beta^2-2\theta\beta)}{2(\beta^2 U-\theta_0T)} $ -
$ w^{st} $ $ \frac{a+c}{2} $ $ \frac{a+c}{2} $ -
$ p_0^{st} $ - $ \frac{a_0}{2} $ $ \frac{a_0}{2} $
$ p_1^{st} $ $ a-\frac{(a-c)(4\theta^3+2\theta^2\beta-\beta^3-2\theta\beta^2)}{2T} $ $ \frac{a+c}{2}+\frac{V(2\theta^2-\beta^2)(2\theta-\beta)}{2(\beta^2 U-\theta_0T)} $ -
$ p_2^{st} $ $ a-\frac{\theta(a-c)(4\theta^2+2\theta\beta-3\beta^2)}{2T} $ $ \frac{a+c}{2}+\frac{\theta V(4\theta^2-\beta^2-2\theta\beta)}{2(\beta^2 U-\theta_0T)} $ -
$ \Pi_0^{st} $ $ \frac{U(a-c)^2}{4T} $ $ \frac{U(a-c)(a_0\beta+V)-a_0^2T}{4(\beta^2 U-\theta_0T)} $ $ \frac{a_0^2}{4\theta_0} $
$ \Pi_{1}^{st} $ $ \frac{\theta(a-c)^2(2\theta-\beta)(4\theta^3-2\theta^2\beta+\beta^3-2\theta\beta^2)}{2T^2} $ $ \frac{T(2\theta-\beta)^2V^2}{8(\beta^2 U-\theta_0T)^2} $ -
$ \Pi_{2}^{st} $ $ \frac{\theta(a-c)^2(4\theta^2-\beta^2-2\theta\beta)^2}{4T^2} $ $ \frac{\theta V^2(4\theta^2-2\theta\beta-\beta^2)^2}{4(\beta^2 U-\theta_0T)^2} $ -
where $ T = 4\theta(2\theta^2-\beta^2) $, $ U = 8\theta^2-4\theta\beta-\beta^2 $, $ V = a_0\beta-\theta_0(a-c) $
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Structure Wholesale supplier Dual-channel Monopoly retailer
Cournot $ \delta\leq\frac{2\beta}{2\theta+\beta} $ $ \frac{2\beta}{2\theta+\beta}<\delta<\frac{\theta_0}{\beta} $ $ \delta\geq\frac{\theta_0}{\beta} $
$ q^{co}_0 $ - $ \frac{2\beta(a-c)-a_0(2\theta+\beta)}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ $ \frac{a_0}{2\theta_0} $
$ q^{co}_1 $ $ \frac{a-c}{2(2\theta+\beta)} $ $ \frac{V}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ -
$ q^{co}_2 $ $ \frac{a-c}{2(2\theta+\beta)} $ $ \frac{V}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ -
$ w^{co} $ $ \frac{a+c}{2} $ $ \frac{a+c}{2} $ -
$ p_0^{co} $ - $ \frac{a_0}{2} $ $ \frac{a_0}{2} $
$ p_1^{co} $ $ \frac{(a+c)(\theta+\beta)+2a\theta}{2(2\theta+\beta)} $ $ \frac{a+c}{2}+\frac{V\theta}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ -
$ p_2^{co} $ $ \frac{(a+c)(\theta+\beta)+2a\theta}{2(2\theta+\beta)} $ $ \frac{a+c}{2}+\frac{V\theta}{2[2\beta^2-\theta_0(2\theta+\beta)]} $ -
$ \Pi_0^{co} $ $ \frac{(a-c)^2}{2(2\theta+\beta)} $ $ \frac{2(a-c)(a_0\beta+V)-a_0^2(2\theta+\beta)}{4[2\beta^2-\theta_0(2\theta+\beta)]} $ $ \frac{a_0^2}{4\theta_0} $
$ \Pi_{1}^{co} $ $ \frac{\theta(a-c)^2}{4(2\theta+\beta)^2} $ $ \frac{\theta V^2}{4[2\beta^2-\theta_0(2\theta+\beta)]^2} $ -
$ \Pi_{2}^{co} $ $ \frac{\theta(a-c)^2}{4(2\theta+\beta)^2} $ $ \frac{\theta V^2}{4[2\beta^2-\theta_0(2\theta+\beta)]^2} $ -
Collusion $ \delta\leq\frac{\beta}{\theta+\beta} $ $ \frac{\beta}{\theta+\beta}<\delta<\frac{\theta_0}{\beta} $ $ \delta\geq\frac{\theta_0}{\beta} $
$ q^{cn}_0 $ - $ \frac{a_0(\theta+\beta)-\beta(a-c)}{2[\theta_0(\theta+\beta)-\beta^2]} $ $ \frac{a_0}{2\theta_0} $
$ q^{cn}_1 $ $ \frac{a-c}{4(\theta+\beta)} $ $ \frac{V}{4[\beta^2-\theta_0(\theta+\beta)]} $ -
$ q^{cn}_2 $ $ \frac{a-c}{4(\theta+\beta)} $ $ \frac{V}{4[\beta^2-\theta_0(\theta+\beta)]} $ -
$ w^{cn} $ $ \frac{a+c}{2} $ $ \frac{a+c}{2} $ -
$ p_0^{cn} $ - $ \frac{a_0}{2} $ $ \frac{a_0}{2} $
$ p_1^{cn} $ $ \frac{3a+c}{4} $ $ \frac{a+c}{2}+\frac{(\theta+\beta)V}{4[\beta^2-\theta_0(\theta+\beta)]} $ -
$ p_2^{cn} $ $ \frac{3a+c}{4} $ $ \frac{a+c}{2}+\frac{(\theta+\beta)V}{4[\beta^2-\theta_0(\theta+\beta)]} $ -
$ \Pi_0^{cn} $ $ \frac{(a-c)^2}{4(\theta+\beta)} $ $ \frac{(a-c)(V+a_0\beta)-a_0^2(\theta+\beta)}{4[\beta^2-\theta_0(\theta+\beta)]} $ $ \frac{a_0^2}{4\theta_0} $
$ \Pi_{1}^{cn} $ $ \frac{(a-c)^2}{16(\theta+\beta)} $ $ \frac{V^2(\theta+\beta)}{16[\beta^2-\theta_0(\theta+\beta)]^2} $ -
$ \Pi_{2}^{cn} $ $ \frac{(a-c)^2}{16(\theta+\beta)} $ $ \frac{V^2(\theta+\beta)}{16[\beta^2-\theta_0(\theta+\beta)]^2} $ -
Stackelberg $ \delta\leq\frac{\beta U}{T} $ $ \frac{\beta U}{T}<\delta<\frac{\theta_0}{\beta} $ $ \delta\geq\frac{\theta_0}{\beta} $
$ q^{st}_0 $ - $ \frac{\beta U(a-c)-a_0T}{2(\beta^2 U-\theta_0T)} $ $ \frac{a_0}{2\theta_0} $
$ q^{st}_1 $ $ \frac{\theta(a-c)(2\theta-\beta)}{T} $ $ \frac{\theta V(2\theta-\beta)}{\beta^2 U-\theta_0T} $ -
$ q^{st}_2 $ $ \frac{(a-c)(4\theta^2-\beta^2-2\theta\beta)}{2T} $ $ \frac{V(4\theta^2-\beta^2-2\theta\beta)}{2(\beta^2 U-\theta_0T)} $ -
$ w^{st} $ $ \frac{a+c}{2} $ $ \frac{a+c}{2} $ -
$ p_0^{st} $ - $ \frac{a_0}{2} $ $ \frac{a_0}{2} $
$ p_1^{st} $ $ a-\frac{(a-c)(4\theta^3+2\theta^2\beta-\beta^3-2\theta\beta^2)}{2T} $ $ \frac{a+c}{2}+\frac{V(2\theta^2-\beta^2)(2\theta-\beta)}{2(\beta^2 U-\theta_0T)} $ -
$ p_2^{st} $ $ a-\frac{\theta(a-c)(4\theta^2+2\theta\beta-3\beta^2)}{2T} $ $ \frac{a+c}{2}+\frac{\theta V(4\theta^2-\beta^2-2\theta\beta)}{2(\beta^2 U-\theta_0T)} $ -
$ \Pi_0^{st} $ $ \frac{U(a-c)^2}{4T} $ $ \frac{U(a-c)(a_0\beta+V)-a_0^2T}{4(\beta^2 U-\theta_0T)} $ $ \frac{a_0^2}{4\theta_0} $
$ \Pi_{1}^{st} $ $ \frac{\theta(a-c)^2(2\theta-\beta)(4\theta^3-2\theta^2\beta+\beta^3-2\theta\beta^2)}{2T^2} $ $ \frac{T(2\theta-\beta)^2V^2}{8(\beta^2 U-\theta_0T)^2} $ -
$ \Pi_{2}^{st} $ $ \frac{\theta(a-c)^2(4\theta^2-\beta^2-2\theta\beta)^2}{4T^2} $ $ \frac{\theta V^2(4\theta^2-2\theta\beta-\beta^2)^2}{4(\beta^2 U-\theta_0T)^2} $ -
where $ T = 4\theta(2\theta^2-\beta^2) $, $ U = 8\theta^2-4\theta\beta-\beta^2 $, $ V = a_0\beta-\theta_0(a-c) $
Table 2.  Partial derivatives of optimal quantity with respect to $a_k$ in three patterns
Cournot $a_0$ $a_1$ $a_2$
$q^{co}_0$ $\frac{-E}{2P}$ $\frac{\beta(2\theta_2-\beta)}{2P}$ $\frac{\beta(2\theta_1-\beta)}{2P}$
$q^{co}_1$ $\frac{-\beta(\beta-2\theta_2)}{2P}$ $\frac{P(2\theta_2D+E)-\beta^2(2\theta_2-\beta)^2D}{2PDE}$ $\frac{-P(\beta D+E)-\beta^2(2\theta_1-\beta)(2\theta_2-\beta)D}{2PDE}$
$q^{co}_2$ $\frac{-\beta(\beta-2\theta_1)}{2P}$ $\frac{-P(\beta D+E)-\beta^2(2\theta_1-\beta)(2\theta_2-\beta)D}{2PDE}$ $\frac{P(2\theta_1D+E)-\beta^2(2\theta_1-\beta)^2D}{2PDE}$
Collusion $a_0$ $a_1$ $a_2$
$q^{cn}_0$ $\frac{\theta_1\theta_2-\beta^2}{Q}$ $\frac{-\beta(\theta_2-\beta)}{2Q}$ $\frac{-\beta(\theta_1-\beta)}{2Q}$
$q^{cn}_1$ $\frac{\beta(\beta-\theta_2)}{2Q}$ $\frac{Q(2\theta_2G+H)+2G\beta^2(\theta_2-\beta)^2}{4QGH}$ $\frac{-Q(2\beta G+H)+2G\beta^2(\theta_1-\beta)(\theta_2-\beta)}{4QGH}$
$q^{cn}_2$ $\frac{\beta(\beta-\theta_1)}{2Q}$ $\frac{-Q(2\beta G+H)+2G\beta^2(\theta_1-\beta)(\theta_2-\beta)}{4QGH}$ $\frac{Q(2\theta_1G+H)+2G\beta^2(\theta_2-\beta)^2}{4QGH}$
Stackelberg $a_0$ $a_1$ $a_2$
$q^{st}_0$ $\frac{2M\theta_2}{R}$ $\frac{-\theta_2\beta(2\theta_2-\beta)}{R}$ $\frac{-\beta S}{2R}$
$q^{st}_1$ $\frac{\theta_2\beta(\beta-2\theta_2)}{R}$ $\frac{R(\theta_2 N+2\theta_2M)+\theta_2\beta^2(2\theta_2-\beta)^2N}{2RMN}$ $\frac{-R(4M\theta_2+\beta N)+\beta^2(2\theta_2-\beta)SN}{4RMN}$
$q^{st}_2$ $\frac{\beta(2\theta_2\beta-E)}{2R}$ $\frac{-R(4M\theta_2+\beta N)+\beta^2(2\theta_2-\beta)SN}{4RMN}$ $\frac{RNE+S^2(\beta^2N-2M\theta_0\theta_2)}{4\theta_2RMN}$
where $P=\beta^2D-\theta_0E$, $Q=\theta_0H-\beta^2G$, $R=4M\theta_0\theta_2-\beta^2N$, $S=E-2\theta_2\beta$.
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Cournot $a_0$ $a_1$ $a_2$
$q^{co}_0$ $\frac{-E}{2P}$ $\frac{\beta(2\theta_2-\beta)}{2P}$ $\frac{\beta(2\theta_1-\beta)}{2P}$
$q^{co}_1$ $\frac{-\beta(\beta-2\theta_2)}{2P}$ $\frac{P(2\theta_2D+E)-\beta^2(2\theta_2-\beta)^2D}{2PDE}$ $\frac{-P(\beta D+E)-\beta^2(2\theta_1-\beta)(2\theta_2-\beta)D}{2PDE}$
$q^{co}_2$ $\frac{-\beta(\beta-2\theta_1)}{2P}$ $\frac{-P(\beta D+E)-\beta^2(2\theta_1-\beta)(2\theta_2-\beta)D}{2PDE}$ $\frac{P(2\theta_1D+E)-\beta^2(2\theta_1-\beta)^2D}{2PDE}$
Collusion $a_0$ $a_1$ $a_2$
$q^{cn}_0$ $\frac{\theta_1\theta_2-\beta^2}{Q}$ $\frac{-\beta(\theta_2-\beta)}{2Q}$ $\frac{-\beta(\theta_1-\beta)}{2Q}$
$q^{cn}_1$ $\frac{\beta(\beta-\theta_2)}{2Q}$ $\frac{Q(2\theta_2G+H)+2G\beta^2(\theta_2-\beta)^2}{4QGH}$ $\frac{-Q(2\beta G+H)+2G\beta^2(\theta_1-\beta)(\theta_2-\beta)}{4QGH}$
$q^{cn}_2$ $\frac{\beta(\beta-\theta_1)}{2Q}$ $\frac{-Q(2\beta G+H)+2G\beta^2(\theta_1-\beta)(\theta_2-\beta)}{4QGH}$ $\frac{Q(2\theta_1G+H)+2G\beta^2(\theta_2-\beta)^2}{4QGH}$
Stackelberg $a_0$ $a_1$ $a_2$
$q^{st}_0$ $\frac{2M\theta_2}{R}$ $\frac{-\theta_2\beta(2\theta_2-\beta)}{R}$ $\frac{-\beta S}{2R}$
$q^{st}_1$ $\frac{\theta_2\beta(\beta-2\theta_2)}{R}$ $\frac{R(\theta_2 N+2\theta_2M)+\theta_2\beta^2(2\theta_2-\beta)^2N}{2RMN}$ $\frac{-R(4M\theta_2+\beta N)+\beta^2(2\theta_2-\beta)SN}{4RMN}$
$q^{st}_2$ $\frac{\beta(2\theta_2\beta-E)}{2R}$ $\frac{-R(4M\theta_2+\beta N)+\beta^2(2\theta_2-\beta)SN}{4RMN}$ $\frac{RNE+S^2(\beta^2N-2M\theta_0\theta_2)}{4\theta_2RMN}$
where $P=\beta^2D-\theta_0E$, $Q=\theta_0H-\beta^2G$, $R=4M\theta_0\theta_2-\beta^2N$, $S=E-2\theta_2\beta$.
Table 3.  The optimal solutions for three different competitive behaviors
Optimal $q_0$ $q_1 $ $q_2 $ $w$ $p_0$ $p_1$ $p_2$ $\Pi_0$ $\Pi_1$ $\Pi_2$
Cournot $4.83$ $3.44$ $2.90$ $14.25$ $8.00$ $17.69$ $20.06$ $116.36$ $11.85$ $16.86$
Collusion $5.29$ $2.81$ $2.60$ $14.13$ $8.00$ $18.24$ $20.74$ $108.01$ $11.57$ $17.23$
Stackelberg $4.76$ $3.58$ $2.90$ $14.23$ $8.00$ $17.59$ $20.03$ $117.35$ $12.04$ $16.82$
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Optimal $q_0$ $q_1 $ $q_2 $ $w$ $p_0$ $p_1$ $p_2$ $\Pi_0$ $\Pi_1$ $\Pi_2$
Cournot $4.83$ $3.44$ $2.90$ $14.25$ $8.00$ $17.69$ $20.06$ $116.36$ $11.85$ $16.86$
Collusion $5.29$ $2.81$ $2.60$ $14.13$ $8.00$ $18.24$ $20.74$ $108.01$ $11.57$ $17.23$
Stackelberg $4.76$ $3.58$ $2.90$ $14.23$ $8.00$ $17.59$ $20.03$ $117.35$ $12.04$ $16.82$
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