Supplier’s cooperation strategy with two competing manufacturers under wholesale price discount contract considering technology investment

Cooperation between upstream suppliers and downstream manufacturers in technology investment is a popular way to improve production for reducing suppliers’ costs of key components. The cooperation strategies are mainly influenced by manufacturers’ investments wholesale price discount contracts provided suppliers. This paper explores whether supplier should cooperate with two competing accept their reduce the supplier’s cost component. Specifically, we consider following three strategies: does not investments, only accepts one manufacturer’s both investments. Our results demonstrate that contract can enhance profits when degree low. Further, conclude relatively low or efficiency high, optimal strategy also willing invest simultaneously. At last, extend model asymmetric potential market size show our theoretical robust.