Differential game and simulation of supply chain joint promotion considering spillover effect

The application of big data technology and the change of consumers’ concept make the game between supply chain members move from competition to un-ion. Under the premise of considering the impact of promotional spillover effects on the promotion decisions of supply chain members, promotion spillover effect affects the promotion decision of supply chain members. Taking the product reputation as the state variable, this paper studies the joint promotion problem in a two-tier supply chainc, which is composed of a single manufacturer and two retailers with promotion spillovers. This paper constructs three decision-making models: centralized decision-making, decentralized decision-making and cost-sharing decision-making with spillover effect. The results show that the spillover effect only increases the sales promotion effort, product reputation and demand of the centralized decision-making retailers, it has no effect on the retailer’s promotion effort, product reputation and demand of de-centralized decision-making and cost-sharing decision-making. Spillover effect can improve the total profit of supply chain in three decision-making modes: centralized decision-making, decentralized decision-making and cost-sharing decision-making. Under the decision of cost-sharing, manufacturers are more willing to increase the cost-sharing ratio with the increase of spillover effect, and the cost-sharing ratio of manufacturers should be kept in a certain range, if the costsharing ratio exceeds a certain value, it will harm the benefit of the manufacturer, and the profit of the retailer will increase with the increase of the cost-sharing ratio of the manufacturer.