A game theory approach in seller–buyer supply chain

In this paper, several seller–buyer supply chain models are proposed which incorporate both cost factors as well as elements of competition and cooperation between seller and buyer. We assume that unit marketing expenditure and unit price charged by the buyer influence the demand of the product bein...

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Bibliographic Details
Published in:European journal of operational research 2009-06, Vol.195 (2), p.442-448
Main Authors: Esmaeili, M., Aryanezhad, Mir-Bahador, Zeephongsekul, P.
Format: Article
Language:English
Subjects:
Applied sciences
Cooperation
Cooperative and non-cooperative game theory
Cooperative and non-cooperative game theory Marketing Pricing Seller-buyer supply chain
Exact sciences and technology
Firm modelling
Game theory
Logistics
Marketing
Operational research and scientific management
Operational research. Management science
Pricing
Seller–buyer supply chain
Studies
Supply chains
Vendor supplier relations
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Summary:In this paper, several seller–buyer supply chain models are proposed which incorporate both cost factors as well as elements of competition and cooperation between seller and buyer. We assume that unit marketing expenditure and unit price charged by the buyer influence the demand of the product being sold. The relationships between seller and buyer will be modeled by non-cooperative and cooperative games, respectively. The non-cooperative game is based on the Stackelberg strategy solution concept, where we consider separately the case when the seller is the leader ( Seller-Stackelberg) and also when the buyer is the leader ( Buyer-Stackelberg). Pareto efficient solutions will be provided for the cooperative game model. Numerical examples presented in this paper, including sensitivity analysis of some key parameters, will compare the results between different models considered.
ISSN:0377-2217
1872-6860
DOI:10.1016/j.ejor.2008.02.026