An outsourcing game study on the integration of end distribution in the express industry

In this paper, we build a duopoly game model consisting of two logistics enterprises and a third-party company, with the consideration of the cost, quality, and competitions among the players, to analyze the equilibriums under different situations with the objective of maximizing the interests of all parties involved. Then we examine the relationships between the dominate strategies and the key game drivers: competition, service quality and management capacity of the third party. Numerical experiments for different level of the market volume are presented as well. Finally, we conclude this paper with some managerial insights on distribution strategies: outsourcing or not.