01555079

Component

Considering a seller-buyer supply chain system consisting of two manufacturers and two retailers, this paper investigates both vertical and horizontal cooperations and competitions among the four players, based on a two-stage non-cooperative game theoretical approach. A Stackelberg game with the manufacturer as the leader and the retailer as the follower is proposed. The Nash equilibrium pricing decisions are presented. It is found that for a game with identical players, Nash equilibrium prices for each of the four players are its lowest- possible price. Each player shares 50% of the market. For the games with different players, the retailer which has constrained price option, sets the equilibrium price at the lowest- possible level. Another retailer with a choice of higher price, will choose a equilibrium price, which is slightly higher than the lower bound of retailing price. Nash equilibrium price for the manufacturer with a constrained option of bounds, is its lowest-possible price. The pricing rules obtained from this study will be helpful for a better understanding of the process of competition, cooperation and decision-making in supply chain management.

This paper was sponsored by TRB committee AT015 Freight Transportation Planning and Logistics.

01550057

15-2109

English

19p

2015

Transportation Research Board 94th Annual Meeting

Digital/other

Figures; References; Tables

Competition; Cooperation; Decentralization; Decision making; Game theory; Pricing; Supply chain management

Administration and Management; Finance; Freight Transportation; Planning and Forecasting; I10: Economics and Administration; I72: Traffic and Transport Planning

Transportation Research Board Annual Meeting 2015 Paper #15-2109

TRIS, TRB, ATRI

Dec 30 2014 12:45PM