Abstract: With the rapid development of e-commerce technology and the change of consumers’ shopping concepts, more and more manufacturers break through the original single traditional sales channel and gain greater market competitiveness by opening up electronic direct sales channels. However, the existence of dual channels has intensified the competition between manufacturers and retailers, leading to the coexistence of horizontal and vertical competition in the supply chain. Although existing studies have shown that the centralized decision-making between manufacturers and retailers is the optimal equilibrium solution. For self-interested motives, both will choose to cut prices separately to increase market share, i.e., to take non-cooperation as the dominant strategy, which leads to non-cooperative decentralized decision-making as the Nash equilibrium solution in the prisoner’s dilemma of the supply chain. Therefore, it is necessary to study the influence mechanism of different strategic combinations of supply chain participants on their utility level and production decision-making, so as to provide reference for coordinated supply chain management.

Key words: dual channel supply chain; channel preference; risk preference; income stream risk; prisoner’s dilemma