This paper studies the group-buying mechanism from a dynamic perspective. We consider a seller that offers a product in the form of group buying (priced low but uncertain) and spot purchasing (priced high but guaranteed). In the case of group buying, the information associated with the number of...

In this paper we develop a supply contract for a two-echelon manufacturer–retailer supply chain with a bidirectional option, which may be exercised as either a call option or a put option. Under the bidirectional option contract, we derive closed-form expressions for the retailer’s optimal...