Price and location competition in supply chain with horizontal altruistic retailers

We consider a supply chain model with one manufacturer and two altruistic retailers, where the manufacturer first chooses the wholesale price, then the retailers determine the location and retail price simultaneously. We analyze each firm's strategies and the consequences for market demand, profit and consumer surplus. We find that the altruistic preferences play a key role in equilibrium outcomes. Specially, altruistic preferences could improve the profits of firms under certain conditions. Furthermore, we show that the supply chain can be coordinated with the derivative version of revenue sharing contract. Finally, we employ numerical analysis to demonstrate more managerial insights.