An equilibrium-based framework for managing collusion in multi-channel supply chains

Collusion among retailers remains a persistent concern in multi-channel supply chains, where competition has intensified with the rise of online platforms and direct manufacturer sales. Despite extensive research on channel coordination and pricing strategies, limited attention has been given to how e-tailers and direct web-store channels influence collusive behavior and welfare outcomes. To address this gap, this study develops a game-theoretic model of a manufacturer-led supply chain comprising a traditional retailer, an e-tailer, and a manufacturer’s direct web-store. We analyze four structural scenarios and three decision-making modes (competition, collusion, and centralized coordination) to derive the equilibrium strategies of all participants. The results show that collusion increases retailers’ joint profits only when no web-store channel exists, but introducing a direct channel weakens the profitability and stability of collusion. Moreover, the welfare effects depend critically on the e-tailer’s contractual design: under the agency format, collusion may enhance coordination and total welfare, while under the reselling format, it raises prices and harms consumers. The study contributes to the emerging literature on anti-collusion mechanisms in digital supply chains, offering analytical insights and managerial guidance for manufacturers, retailers, and regulators seeking to manage competition and fairness in multi-channel environments.