E‐commerce supply chains and their members face risks from cyber‐attacks. Consumers who purchase goods online also risk having their private information stolen. Thus, businesses are investing to ...improve cyber‐security at a nontrivial cost. In this paper, we conduct a Stackelberg game‐theoretical analysis. In the basic model, we first derive the equilibrium pricing and cyber‐security level decisions in the e‐commerce supply chain. Based on real‐world practices, we then explore whether governments should impose cyber‐security penalty schemes. Our findings show that when the government is characterized by having sufficiently high emphasis on consumer surplus, implementing the penalty scheme is beneficial to social welfare. Then, we extend the analysis to examine how adopting systems security enhancing technologies (such as blockchain) will affect the government's choice of imposing penalty. We uncover that when it is beneficial to have government's penalty scheme, the technology benefit‐to‐cost ratio is a critical factor that governs whether the optimal penalty will be lower or higher with the adoption of systems security enhancing technologies. To generate more insights, we conduct further analyses for various extended modeling cases (e.g., with alliance, competition, and the defense‐level dependent penalty scheme) and find that our main results remain robust. One important insight we have uncovered in this study is that imposing government penalty schemes on cyber‐security issues may do more harm than good; while once it is beneficial to implement, the government should charge the heaviest possible fine. This finding may explain why in the real world, governments basically always adopt a polarized strategy, that is, either do not impose penalty or impose a super heavy penalty, on cyber‐security issues.
•I consider two competing suppliers in a platform: high- and low-volume suppliers.•The paper examines strategic contracting between the platform and suppliers.•Each supplier chooses one of two ...contracts: wholesale or agency.•Asymmetric contract choices can arise in equilibrium.
This paper examines strategic contracting between a monopoly platform and suppliers that sell their goods through the platform. I consider two competing suppliers: a high-volume supplier with the larger potential demand and a low-volume supplier with the smaller one. Each supplier chooses one of two contracts: wholesale or agency. The platform has to strategically determine the royalty rate for the agency contract by taking into account which contracts the suppliers will choose. I show that the platform offers a low (high) royalty rate to induce the suppliers to adopt the agency (wholesale) contract when product substitutability is low (high) enough. More interestingly, when the degree of substitution is at an intermediate level, asymmetric contracting, in which only the low-volume supplier adopts the agency contract, can arise in equilibrium. This result is related to the fact that many long-tail and niche products with lower potential market sizes are traded on platform-based marketplaces, such as Amazon Marketplace and Walmart Marketplace.
Motivated by dual sales channel operations in cross‐border e‐commerce, we analyze an e‐tailer's strategic waiting decision for channel disruption information in a global supply chain. The e‐tailer ...operates two sales channels: a bonded‐warehouse channel with products prestocked before channel disruption for demand fulfillment; and a direct‐shipping channel with products delivered directly from an overseas supplier. The direct‐shipping channel is exposed to disruption risk that might be caused by extreme weather events. Forecasts about the disruption are accurate, and the e‐tailer has the option of waiting for disruption forecasts and postponing order decisions in the bonded‐warehouse channel. We find that the e‐tailer is better off waiting if the direct‐shipping channel is either much more or much less important than the bonded‐warehouse channel. By waiting, the e‐tailer has the flexibility to adjust the stock in the bonded‐warehouse channel (depending on whether the direct‐shipping channel will be disrupted), enhancing channel coordination. However, anticipating the e‐tailer's improved channel coordination, the supplier might increase wholesale prices to extract more profits from the e‐tailer. If the direct‐shipping channel is highly important, waiting brings a significant benefit from channel coordination, offsetting the cost increase in the bonded‐warehouse channel. If the direct‐shipping channel is much less important, this channel provides the e‐tailer with leverage against the supplier in wholesale pricing; the e‐tailer waits strategically for sourcing cost reduction. This study emphasizes the role of strategic waiting for disruption information and signifies the importance of considering horizontal channel coordination and vertical interaction along supply chains.
We investigate how the coronavirus pandemic affected the demand for online food shopping services using data from the largest agri‐food e‐commerce platform in Taiwan. We find that an additional ...confirmed case of COVID‐19 increased sales by 5.7% and the number of customers by 4.9%. The demand for grains, fresh fruit and vegetables, and frozen foods increased the most, which benefited small farms over agribusinesses. The variety of products sold on the e‐commerce platform also increased during the pandemic, which suggests the concentration of sales on niche products could increase as more consumers are drawn to online platforms. Our investigation of mechanisms for the shift to online food shopping indicates that sales were highly responsive to COVID‐19 media coverage and online content.
•E-tailers selling global brand products always benefit from blockchain as quality verification.•Blockchain will increase the MNF’s wholesaling profit, but reduces the benefits from retailing and ...tax-planning.•MNF’s participation decisions are influenced by competition and tax disparity between tax jurisdictions.•Tariff and blockchain cost hinder the MNF from participating in blockchain.
The e-tailers selling global brands’ products on cross-border e-commerce platforms have been suffering from low-quality image. To solve this problem, some platforms (e.g., eBay, Lazada, and Tmall Global) have utilized blockchain for quality verification that creates customers’ trust and guarantees the products’ quality. It is widely acknowledged that the operations of blockchain require all supply chain parties’ participation. Therefore, whether the owners of the global brands have incentives to verify the quality and origin of the goods via blockchain can be critical, especially when the brand-owners are multinational firms (MNFs) owning retail divisions in the same market. In this paper, we study a co-opetitive supply chain consisting of an MNF located in high tax country/region and an e-tailer sourcing from the MNF and reselling the goods. The e-tailer competes with the MNF’s retail division in a low-tax country/region. We find that, blockchain is a double-edged sword for the MNF. It increases the MNF’s wholesaling profit, but reduces the MNF’s retailing profit and tax-planning benefit. Consequently, the MNF will not participate in blockchain if the tax disparity is large and the downstream competition is fierce.
We examine a model in which a supplier sells products through an online platform and an offline retailer under conditions of demand uncertainty. The actual demand potential can be observed (or ...predicted accurately using rich sales data) by the platform and retailer, but not by the supplier. The model addresses the following issues. First, the supplier optimizes its multi‐channel strategy, including a selling format choice in the online channel and optimal pricing. Specifically, although a traditional wholesale model is used offline, both wholesale and agency models are prepared online. Given a commission rate set by the platform for the agency model, the supplier chooses one selling format from the two models. The second one is related to the platform's information‐sharing policy. The platform can commit to sharing its demand information with the supplier. This study elucidates how the platform's information sharing alters the supplier's multi‐channel management and subsequently affects the retailer eventually. Results show that the platform charges its commission rate so that the supplier chooses the agency model, unless the consumer demand is sufficiently uncertain. We also demonstrate that the platform's information sharing capability makes the agency model more likely to be adopted. However, information transparency arising from the platform's voluntary information disclosure can be unfavorable to the retailer. Finally, we demonstrate that, with information sharing, a shift from wholesale to agency models can be desirable not only for the platform and supplier, but also for the retailer (i.e., Pareto‐improving).
Local and regional food systems (LRFS) innovated during COVID‐19 to respond to market demand and policy changes. Given their unique characteristics, we identify drivers that explain why local ...responses to COVID‐19 vary when compared with the national dialogue on food supply chain disruptions. We suggest LFRS enterprises are nimble and connected to supply chain partners, allowing them to innovate quickly with a targeted approach. Considering the shorter supply chains and smaller operations typical of LRFS, we assert the current regulatory environment's fairness and relevance may be scrutinized. In conclusion, we articulate an updated research and technical assistance agenda for LRFS.
This study examines a dual-channel supply chain structure, in which the retailer and e-commerce platform can free ride the other’s sales efforts and the e-commerce platform can provide online finance ...services to the capital-constrained supplier. This study proves that bidirectional free riding under online finance can provide extra benefits to supply chain participants such as boosting total market share and enhancing participants’ profits. Through the formulation of a comprehensive model incorporating the price substitution effect, the positive effect of free riding and the negative effect of being free ridden, and different sales efforts and associated cost factors, we examine the impacts of free-riding behavior and online finance adoption on optimal pricing, efforts, and quantity, as well as on channel structure, market share, and pricing competition. We found that, in the same free-riding scenario, more retailer and e-commerce platform efforts lead to higher pricing. Being free ridden motivates participants to input more effort. Our study proves connections exist between free riding and online finance. We find the adoption of online finance between the supplier and e-commerce platform influences the retailer’s efforts input and that the free-riding phenomenon between the retailer and e-commerce platform affects the supplier’s willingness to accept online finance. We also extend our analytics to different scenarios with stochastic demand or limited loan-offering options. This study’s findings can guide firms to better implement efforts and pricing, adjust channel structure and use online finance to increase profits.
E‐commerce shopping has gradually become a norm in consumers’ choice of shopping channel and part of this shopping process is aided by advance technologies including voice assistants (VA). There is a ...variety of artificial intelligence that is being developed in the market currently, and one of which has gradually gained its presence or information acquisition is the VA. In this paper, we propose a model that investigates the technology acceptance model constructs (perceived ease of use and perceived usefulness) and its effect on the engagement and loyalty between VA and consumers. Our model also investigates the moderating role of localizing VA between transactional and nontransactional based online activities. This study highlights the implication of technology integration in an e‐commerce environment.
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