Study on dual-channel revenue sharing coordination mechanisms based on the free riding

With the rapid development of e-commerce and the adoption of dual channels, free riding becomes more prevalent than ever before and often results in channel conflict. In this paper, we use a game theory approach to investigate this issue; and we explore how to coordinate supply chain by sharing revenue under free riding. Our results show that both the manufacturer and the retailer benefit from the revenue-sharing strategy because of the incremental profit gains generated by the channel coordination.