The Impact of Sticky Supply Chain Relationships in International Soybean Trade Upstream Manufactures' Pricing Decisions

Abstract

Based on the sticky relationship in the supply chain of international soybean trade, this paper explores the reasons for the formation of buyer countervailing power, and at the same time, through constructing a two-stage dynamic game model, it discusses the manufacturer's choice of different pricing forms based on the consideration of buyer countervailing power. The study shows that: (1) when there is buyer resistance, the conclusion that two-part fee system and RPM can make manufacturers gain equal profits is no longer valid. The manufacturer's profits are higher with two-part toll pricing than with RPM. (2) When there is buyer resistance, two-part toll pricing can be implemented only when the buyer resistance is small. (3) When the resistance is small, the manufacturer chooses two-part toll pricing, and when the resistance is large, the manufacturer chooses RPM.