Abstract: Pricing and perform ance of cross-shareholdings in the supply chain of linear demand impact on co-operations in the supply chain as well as the competitive play.Firstly,by Stackelberg game model,corporate-cross shareholdings in the supply chain is discussed,as an at tempt to quantificationally deduce the differences of pricing and profit respectively among non cross-shareholdings,cross-sharehol dings and vertical integration.Besides,with deducing the model,it is concluded that cross shareholdings makes the market price fall while increasing the total revenue of corporations in the supply chain.Finally,by comparing the external effects,corporate strategy recommendations of supporting cross shareholdings and limiting excessive vertical integration are put forward.

Key words: supply chain, cross-shareholdings, pricing and profit, external effects, Stackelberg game model