Equilibrium contract strategies under asymmetric product substitutability

This paper investigates how asymmetric product substitutability affect the equilibrium contract choices as well as the performances of the supply chain players. We consider a market with two competing supply chains, including two competing manufacturers and two common retailers. Two frequently used contracts: wholesale-price and quantity-discount are considered. We find that under whether the wholesale-price or quantity-discount contract can be chosen by manufacturers would depend on the degree of product substitutability.