# Manufacturer Channel Encroachment and Evolution in E-Platform Supply Chain: An Agent-Based Model
## 4 Simulation and Results
### The Effect of Consumer Quality Preference  
This study discusses consumers who have a preference for quality. In the benchmark model, consumers' preferences for high and low-quality products are 0.6 and 0.4 respectively, a relatively small difference. Under scenario B, consumer preference for high-quality products increases from 0.6 to 0.8, i.e., consumers have a higher expectation of product quality. **Observation 1**. : _Consumer quality preference has an impact on the number of dual-channel manufacturers (NDM), retail channel prices, product sales, and consumer utility._  
As shown in Figure 5, an increase in quality preference reduces the number of dual-channel manufacturers. Under scenario A, 5 out of 100 experiments have 6 dual-channel manufacturers remaining after 100 periods of running and 1 experiment has 7 dual-channel manufacturers remaining. However, under scenario B there are only 3 and 0 experiments respectively. With a stronger preference for quality, the survival of 7 dual-channel manufacturers no longer occurs, with a maximum of 6. \begin{table}
\begin{tabular}{c c c c c} \hline \hline \multirow{2}{*}{**Scenario**} & \multicolumn{2}{c}{**Consumer Quality**} & \multirow{2}{*}{**Consumer Channel**} & \multirow{2}{*}{**Direct Sales Channel**} & \multirow{2}{*}{**E-Commerce Platform**} \\  & **Preference for the** & & & \\  & **High-Quality Product (\(\alpha\))** & & & \\ \hline A & 0.6 & 1:1 & 200 & 0.1 \\ B & 0.8 & 1:1 & 200 & 0.1 \\ C & 0.6 & 3:1 & 200 & 0.1 \\ D & 0.6 & 1:1 & 300 & 0.1 \\ E & 0.6 & 1:1 & 200 & 0.05 \\ \hline \hline \end{tabular}
\end{table} 
Table 3: Different scenarios. Figure 5: NDM in A and B (\(t=100\)). At \(t=100\), the retail price of high-quality products increases, and that of low-quality products decreases in scenario B. There is no significant difference in the prices of the direct sales channel. The midpoints of the inverted U-shaped curve in Figure 6a,b shift significantly to the right/left, while Figure 6c,d show no significant changes. We conduct two-sample \(t\)-tests to further validate these findings, as shown in Table 4. The results of the hypothesis test indicate that there is a significant difference in retail prices and no significant difference in direct sales prices between the two scenarios. Besides the prices, scenarios A and B differ significantly in terms of product sales and consumer utility. We plot the sales and utility values for the two scenarios in ascending order at \(t=100\) of the 100 experiments. It is clear that as consumer quality preferences increase, product sales decrease and consumer utility increases, as shown in Figure 7. \begin{table}
\begin{tabular}{c c c} \hline \hline
**Null Hypothesis (\(H_{0}\))** & \(p\)**-Value** & **Result** \\ \hline \(\mu_{A}(RP_{H})\geq\mu_{B}(RP_{H})\) & \textless{}0.001 & Reject \\ \(\mu_{A}(RP_{L})\leq\mu_{B}(RP_{L})\) & \textless{}0.001 & Reject \\ \(\mu_{A}(DP_{H})=\mu_{B}(DP_{H})\) & 0.069 & Cannot reject \\ \(\mu_{A}(DP_{L})=\mu_{B}(DP_{L})\) & 0.070 & Cannot reject \\ \hline \hline \end{tabular}
\end{table} 
Table 4: Statistical test results for Scenario A and Scenario B prices. Figure 6: Prices in A and B of: (**a**) high-quality product in retail channel; (**b**) low-quality product in retail channel; (**c**) high-quality product in the direct sales channel; (**d**) low-quality product in the direct sales channel. (\(t=100\)). The above findings are consistent with the actual situation. E-commerce platforms have large volumes, a solid consumer base, and a word-of-mouth base. When consumers have higher quality aspirations, platform endorsement makes buying from e-commerce platforms more reliable. For manufacturers, the cost of operating an independent direct sales channel is borne on top of the high cost of high-quality products. As a result, manufacturers are more likely to forgo channel encroachment and sell higher prices of high-quality products in the resale channel to make more profit.