Abstract: Considering a distribution channel that includes one supplier and two duopoly retailers, effects of group-buying strategy on channel performance are studied under the normal operations case and the demand disruption case. Firstly, some noncooperative game models are established to depict the individual-buying and group-buying strategy in the normal operation case. Thus, properties of each Nash equilibrium strategy are analyzed and the differences between both of them are compared. Effect of group-buying on channel profits, as well as its member's profits are concluded. In addition, comparative static analysis of quantity schedule's coefficients and the operational difference between two duopoly retailers to the Nash equilibrium strategy are given under the asymmetric retailer case and the symmetric retailer case. Secondly, the efficiency of group-buying strategy is analyzed when demands are disrupt. It concludes that: (1) group-buying strategy maybe improves channel performance under the normal operation case, while this result doesn't always exist when retailers are asymmetric; (2) properly allocating the deviation cost of the distribution channel will ensure that the channel performance always improve when retailers choose group-buying under demand disruption circumstance; (3) group-buying will make the product's price be more stable.

Key words: distribution channel, group buying, demand disruption, Nash equilibrium