Evolving strategies of e-commerce and express delivery enterprises with public supervision

Abstract This paper considers the e-commerce enterprises as the principal who outsource logistics services to the express delivery firms acting as the agent. The delivery enterprise faced with incomplete information provides either high- or low-quality logistics services, while the e-firm regulates either actively or passively. Using an evolutionary game model, this paper seeks equilibrium strategies of the two parties under public supervision, with impacts of pertinent parameters on strategy selections illuminated. Analytical results indicate that the delivery firms rely mostly on comparative profit between high- and low-quality logistics services to make decisions, while the e-firms consult to monitoring cost rather than regulatory success rates to make selections between active and passive regulation. When public supervision stays at a relatively deficient level, passive supervision is preferred by the e-firm with the increase of consumer complaint rate. Still, it is possible to maintain the benefits of e-commerce corporations as well as enhance logistical performance in evolutionary games with the help of an operative supervision and punishment mechanism. Additional managerial insights are provided for discussion.