Downstream Entry in a Supply Chain

Abstract

Among manufacturing consumer goods industries, many fi rms compete in the upstream of the s upply chain, however, scant attention
has been paid to the eff ect of downstream entry in a two-ti er supply chain (manufacturers in the upstream and retailers in the downstream for
simplicity) with multiple manufacturers competing in the upstream. This paper extends Tyagi’s model and introduces m and n fi rms that
compete in quantity in the upstream and downstream market, respectively. In special cases, when m equals one or approaches infi nity, our
model will reduce to Tyagi’s or Frank’s model, respectively. Therefore, our model can be deemed as an integrated model of entry issues.