Abstract:

It originates from the complexity of dual-channel supply chains for this study， encompassing both online direct sales by manufacturers and offline distribution through retailers. The focal point of investigation is the optimal pricing and service decision-making in the context of consumer “free-riding” behaviors， where consumers leverage offline channels for product assessment but turn to online channels for purchase， due to perceived differences in product quality across these channels.The core of the problem is encapsulated in a formulated model that considers variables such as the initial quality perception coefficient， the degree of competition between online and offline channels， and the extent of free-riding behavior. These variables are instrumental in determining the optimal strategies for pricing and service provision in a dual-channel supply chain setting. The model is structured to quantify the impact of these variables on decision-making processes and overall profitability within the supply chain.Methodologically， this research adopts a mixed approach that combines theoretical modeling with empirical data analysis. The theoretical framework is built upon the principles of supply chain management and consumer behavior theories， particularly focusing on how quality perception differences between online and offline channels influence consumer purchasing decisions.The primary findings reveal several key insights　Firstly， a high initial quality perception and a preference for offline services， coupled with channel competition， lead to product price premiums in both channels and enhance the service levels of offline retailers， thereby increasing the profitability of the entire supply chain system and its participants. Secondly， when the manufacturer's offline market share is relatively small and consumer free-riding behavior is prevalent， offline prices tend to be lower than online prices， which enhances the manufacturer's profitability and benefits the operation of the dual-channel supply chain. Conversely， when offline prices exceed online prices， it results in reduced profits for both the manufacturer and the supply chain system. Thirdly， as the degree of consumer free-riding increases， the price of products in the online direct sales channel tends to rise， while the price in the distribution channel decreases， consistently impacting the retailer's profit negatively.

Key words: dual-channel supply chain, free-riding, service and pricing, product quality perception