Effects of a Socially Concerned Manufacturer on Endogenous Timing Game in Dual‐Channel Supply Chain

Abstract

As supply chains have expanded and grown more complex, manufacturers increasingly face two simultaneous demands: strategic interaction with downstream retailers and growing social responsibility for the supply chain as a whole. Based on an observable‐delay (endogenous‐timing) game, we study how these demands interact in dual‐channel supply chains – where manufacturers sell through both traditional retail and direct (often online) channels – focusing on a socially concerned manufacturer that internalizes consumer surplus alongside its own profit. We demonstrate that the mode of competition between channels – price versus quantity – critically shapes how social concern affects strategic timing within the supply chain. Under quantity competition, the manufacturer's emphasis on consumer surplus materially influences equilibrium timing; under price competition, it does not. In particular, when social concern is low, the manufacturer does not necessarily move first by setting the direct‐channel quantity before the retailer. Moreover, under quantity competition, heightened social concern may paradoxically shrink the equilibrium set, eliminating the timing sequence that yields the highest consumer surplus.