Contributed Session Thu.2.MA 043

Thursday, 13:15 - 14:45 h, Room: MA 043

Cluster 8: Game theory [...]

Game theory in supply chain management


Chair: Tiru S. Arthanari



Thursday, 13:15 - 13:40 h, Room: MA 043, Talk 1

Tiru S. Arthanari
Game theory and supply chain management: A survey

Coauthor: Nagarajan Krishnamurthy


Recent years have seen an increasing interest in the applications of Game Theory to Supply Chain Management (SCM) and allied areas. We survey some of these results. These include applications of Non-cooperative Games to SCM where, for example, there are competing entities and Nash equilibrium is sought. We also survey applications of Cooperative Games where, for example, the Shapley value is used to share costs (or profits). Examples are [Thun, 2005] where the author discusses applications of Cooperative Game Theory to apportion profit among partners. [Cachon and Netessine, 2003] discuss non-cooperative as well as cooperative game theoretic concepts that have potential for applications to analyzing supply chains. [Esmaeili, Aryanezhad and Zeephongsekul, 2009] propose several seller-buyer supply chain models which incorporate elements of competition as well as cooperation between buyer and seller. [Shuyong et al., 2008] use game theoretic tools to analyze the cost allocation problem in supply chain coordination. Stochastic Games, Bayesian Games etc. have been finding increasing applications in SCM too, and we discuss some of these as well. Illustrative applications are discussed.



Thursday, 13:45 - 14:10 h, Room: MA 043, Talk 2

David Carfì
Game theoretic modeling of supply chain coopetition among growers

Coauthor: Tiru Arthanari


Coopetition in supply chains is studied, by Lincoln (2010), using qualitative research methodology, based on case studies done in New Zealand. Recently, in the Horticultural New Zealand conference, the speakers explained how coopetition was working for their industries (Farmers Weekly, 2010). In this paper we examine the coopetition phenomenon from a game theoretic perspective and give a model that brings out the trajectory of equilibria that will lead to optimal participation among the coalition partners. The model considers a set of growers who can choose to form a coopetitive alliance to market their produce in some external regions, while competing within the internal regions. By means of the general analytical framework of competition, studied by Carfi (2010 and 2011), and others, we show the strategies that could provide solutions in a cooperative perspective for the growers, where these feasible solutions aim at offering a win-win outcome for the growers, letting them share the pie fairly within a growth path represented by a family of non-zero sum games. The strategy requires determining the proportion of their resources they will use and how the gain will be shared.


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