Search Results (7)

This paper investigates the strategic interaction between an online retailer (e.g., Amazon) and a third-party retailer (3PR) under sequential and simultaneous quantity competition models. The platform and 3PR simultaneously compete and cooperate with each other. By game-theoretic analysis, we confirm that the degree of competition between the online retailer and the 3PR in the sequential quantity game is lower than that in the simultaneous quantity game. More importantly, when the two retailers’ products are sold on the platform, their profits are both much higher in the sequential quantity game than in the simultaneous quantity game, leading to a win–win situation. Meanwhile, the coexistence of the two retailers’ products on the platform is able to mitigate the double marginal effect between the online retailer and the 3PR and to increase consumer surplus and social welfare. Our results provide operational insights for platform governance and 3PR participation strategies. Full article

This study examined joint pricing and inventory decisions in a competitive newsvendor environment using a combination of theoretical modeling and experimental methods. We developed a newsvendor model with price competition and inventory decisions. Participants in a laboratory experiment made simultaneous pricing and inventory decisions over 50 rounds, with their opponents’ identities unknown. We theoretically proved the existence of a mixed Nash equilibrium, i.e., different equilibrium prices corresponded to different optimal inventory quantities. The experimental results show that about $50\%$ of the joint pricing and inventory decisions were consistent with the predictions of the equilibrium model. However, systematic deviations from the equilibrium predictions were also observed at the aggregate level. We developed a novel context-dependent quantal response equilibrium model (QRE) for the bivariate newsvendor game setting. The context-dependent quantal response equilibrium model fit the observed decision biases remarkably well, and it was significantly better than the basic QRE model. This research provides insights into decision biases in complex systems and practical guidance for project planning and management. Full article

We analyze a supply chain consisting of a capital-constrained supplier and a platform functioning as a marketplace, where the supplier sells products to consumers via the platform, which charges a commission fee for each item sold. Operating in a market characterized by price-sensitive stochastic demand, the supplier must make simultaneous decisions regarding pricing and production quantity before a selling period. The supplier has three financing options for production: bank financing, platform-guaranteed bank financing, and direct platform financing. Using a Stackelberg game approach, we model these interactions and derive key managerial insights. Our findings reveal that financing choices and commission fees significantly impact the supplier’s pricing and production decisions, as well as the platform’s financing preferences. Generally, while the platform favors direct financing, the supplier prefers guaranteed financing under certain conditions. Full article

In a trade experiment, groups of students were taught how to bargain over a pie generated in a transportation game. Data collection and detailed group reports of the bargaining process allowed us to identify the type of bargaining followed and its correspondence with cooperative game theory concepts. Explicit coalitions were rather scarce (17%), although coalition stability was implied by 47.8% of the agreements. Efficiency was achieved in the vast majority (82%) of cases, whereas in 34.8% of the agreements, students used a lexicographic ordering of multiple solutions before choosing among them. Regarding the bargaining procedure, in 40% of the agreements, quantities traded were decided before profit sharing rules were negotiated, whereas in 16% of the cases they were simultaneously agreed upon. Our findings suggest that bargaining procedures often do not imply explicit coalitions. Moreover, efficiency can be achieved even in the absence of bargaining processes. Full article

This paper investigates information leakage and financing simultaneously in a supply chain (SC) consisting of one capital-constrained supplier and two retailers with private demand-forecast signals. The supplier invests in corporate social responsibility (CSR) events and displays supply uncertainty. The supplier decides whether to leak information (L) or not (N). Additionally, the supplier has two financing strategies: bank credit financing (B) and trade credit financing (T). Thus, by combining the supplier’s information leakage and financing decisions, we formulated four possible strategies (i.e., NB, NT, LB, LT) and built a game analysis model to address the interaction of information leakage and financing decisions. We first provide the SC members’ optimal operational decisions (including the order quantity, the wholesale price and CSR effort level) under four strategies. Subsequently, we compare the profits of the suppliers and retailers under four strategies by combining analytical and numerical analysis. Several interesting results were found: (1) the supplier’s optimal wholesale price, CSR effort level, and profit under information leakage were higher than those under no information leakage; (2) the supplier’s financing decisions are dependent on the loan interest rate as low supply uncertainty and low supply correlation motivate the supplier to prefer choosing trade credit financing; and (3) finally, several interesting insights in managing SCs are provided. Full article

In a competitive electricity market with substantial involvement of renewable electricity, maximizing profits by optimizing bidding strategies is crucial to different power producers including conventional power plants and renewable ones. This paper proposes a game-theoretic bidding optimization method based on bi-level programming, where power producers are at the upper level and utility companies are at the lower level. The competition among the multiple power producers is formulated as a non-cooperative game in which bidding curves are their strategies, while uniform clearing pricing is considered for utility companies represented by an independent system operator. Consequently, based on the formulated game model, the bidding strategies for power producers are optimized for the day-ahead market and the intraday market with considering the properties of renewable energy; and the clearing pricing for the utility companies, with respect to the power quantity from different power producers, is optimized simultaneously. Furthermore, a distributed algorithm is provided to search the solution of the generalized Nash equilibrium. Finally, simulation results were performed and discussed to verify the feasibility and effectiveness of the proposed non-cooperative game-based bi-level optimization approach. Full article

Although in Sweden the simultaneous use of forests for timber production and game hunting are both of socioeconomic importance it often leads to conflicting interests. This study examines forest stakeholder participation in improving game habitat to increase hunting opportunities as well as redistribute game activities in forests to help reduce browsing damage in valuable forest stands. The data for the study were collected from a nationwide survey that involved randomly selected hunters and forest owners in Sweden. An ordered logit model was used to account for possible factors influencing the respondents’ participation in improving game habitat. The results showed that on average, forest owning hunters were more involved in improving game habitat than non-hunting forest owners. The involvement of non-forest owning hunters was intermediate between the former two groups. The respondents’ participation in improving game habitat were mainly influenced by factors such as the quantity of game meat obtained, stakeholder group, forests on hunting grounds, the extent of risk posed by game browsing damage to the economy of forest owners, importance of bagging game during hunting, and number of hunting days. The findings will help in designing a more sustainable forest management strategy that integrates timber production and game hunting in forests. Full article