Abstract: Assuming a supply chain consists of one supplier and two competing retail platforms, this paper investigates supplier pricing and retail platform revenue sharing decision in a competitive environment considering the degree of platform differentiation. Based on the analysis of consumer purchase behavior, this paper discusses the demand function under three pricing strategies (high pricing strategy, medium pricing strategy, and low pricing strategy) of the supplier, and constructs a Nash-Stackelberg game model with the competitive retail platforms as the leader and the supplier as the follower. The equilibrium decisions under three pricing strategies of the supplier are given, and the influence of the degree of differentiation between the platforms on equilibrium decisions and profits for the supply chain members is analyzed. At last, this paper validates the results by numerical examples, and gives the corresponding managerial insights and decision-making suggestions. The results show that: (1) the supplier and the two platforms should make different pricing decisions and revenue sharing decisions based on different pricing strategies and platform differences; (2) an increase in platform differentiation under different pricing strategies will harm the profit of suppliers, but may benefit competitive retail platforms; the platform has a stronger motivation to provide consumers with a characteristic shopping experience to increase the platform differentiation; (3) although the supplier and the two platforms get the highest profits under different pricing strategies, additional mechanisms (Nash bargaining) can be designed to ensure the transaction. This study provides decision-making recommendations for the supplier and competitive retail platforms on how to price products and set revenue sharing rates when consumers consider the degree of differentiation between the platforms.

Key words: platform competition, platform differentiation, pricing, revenue sharing rate, game theory