Farmer-supermarket direct purchase model: considering power asymmetry

Purpose Farmer-supermarket direct purchase (FSDP) is one of the significant innovative modes in the circulation of agricultural products. The previous studies on the FSDP mode were mainly premised on the assumption of power symmetry among cooperative players. Nevertheless, in reality, power asymmetry often exists among players because of restricted coalitions and diverse input resources. In this research, the influence of power asymmetry on profit distribution among various players in FSDP is explored. Design/methodology/approach The power asymmetry within FSDP is explored in two aspects: the distinct status of coalition structure and the varying degrees of dependence among players. Since FSDP is a typical cooperative mode, an average tree solution (abbreviated as “A-T solution”) of a cooperative game with a restricted coalition structure and the tripartite mutual deterrence model with a dependency factor are analyzed. Subsequently, the corresponding profit distribution strategies of FSDP are provided. Findings This research demonstrates that the cooperative coalition structure and/or location and the degree of dependence on other players can affect their profit-earning capacity during the FSDP process. Furthermore, the players' ability to distribute profits is negatively associated with the degree of interdependence (dependency factor). It is shown by the fact that cooperatives are at the center of FSDP, as farmers in China are a dispersed and powerless group; in a word, the FSDP supply chain is a restricted coalition structure. Even in an arbitrary coalition structure, farmers still remain in a weak position and lack the power of speech in the distribution of profits. Therefore, enhancing the position of farmers is necessary to stabilize cooperative relationships in supply chains. Research limitations/implications These methods have broad potential applications to research power asymmetry in supply chain management. However, it is only applicable in situations where significant information on alliance structure and the dependence degree is available. Originality/value This study concentrates on the factors of power asymmetry and investigates the influence of power asymmetry on the profit distribution among players, thereby expanding the depth and width of the research on FSDP. The key contribution of this paper lies in explaining the “unfair” profit distribution scheme in FSDP from coalition cooperative game and bargaining game theory (a mathematical perspective). It provides a decision-making basis for enhancing the overall position of farmers in the agricultural supply chain.