A Duopoly Model in Cournot Markets for Chain-to-Chain Competition Using Visitors in Supply Chains: A Game Theoretic Approach

Document Type : Research Paper

Authors

1 Assistant Professor, Faculty of Industrial and Systems Engineering, Isfahan University of Technology, Isfahan, Iran

2 M.A. student, Faculty of Industrial and Systems Engineering, Isfahan University of Technology, Isfahan, Iran

Abstract

In this paper, we consider a Cournot Market for Chain-To-Chain Competition, which includes two distinct competing supply chains. Each supply chain has one Manufacturer, one Visitor, and one Retailer. The Retailer is in common between the two chains. This article will investigate the impact of using visitors to attract retailers as much as possible by the manufacturer. Each visitor should try to convince retailers to order more by paying a cost named Visit Cost in this article. After selling each unit of considered products, the manufacturer would pay a percentage of the wholesale price. It is assumed that there is a Stackelberg game between the manufacturer and visitor in each supply chain, in which the manufacturer is the leader. Furthermore, there is a Nash competition between manufacturers and the retailer.

Keywords

Main Subjects

References

  • Simchi-Levi, P. kaminsk, and E. Simchi-Levi, Designin and Managing the Supply Chain Concepts, Strategies and Case Studies. McGraw-Hill Education, 2007, p. 498.
  • Yan, "Cooperative advertising, pricing strategy and firm performance in the e-marketing age," (in English), Journal of the Academy of Marketing Science, vol. 38, no. 4, pp. 510-519, 2010/08/01 2010. [Online]. Available: http://dx.doi.org/10.1007/s11747-009-0171-z.
  • Liaukonyte, T. Teixeira, and K. C. Wilbur, "Television Advertising and Online Shopping," Marketing Science, vol. 34, no. 3, pp. 311-330, 2015, doi: doi:10.1287/mksc.2014.0899.
  • Yang, S. Lu, and X. Lu, "Modeling Competition and Its Impact on Paid-Search Advertising," Marketing Science, vol. 33, no. 1, pp. 134-153, 2014, doi: doi:10.1287/mksc.2013.0812.
  • Huang and S. X. Li, "Co-op advertising models in manufacturer–retailer supply chains: A game theory approach," European Journal of Operational Research, vol. 135, no. 3, pp. 527–544, 2001.
  • Jørgensen and G. Zaccour, "A survey of game-theoretic models of cooperative advertising," European Journal of Operational Research, vol. 237, no. 1, pp. 1–14, 2014.
  • Zhang, Q. Gou, L. Liang, and Z. Huang, "Supply chain coordination through cooperative advertising with reference price effect," Omega, vol. 41, no. 2, pp. 345-353, 4// 2013, doi: http://dx.doi.org/10.1016/j.omega.2012.03.009.
  • Kunter, "Coordination via cost and revenue sharing in manufacturer–retailer channels," European Journal of Operational Research, vol. 216, no. 2, pp. 477-486, 2012.
  • Xie and J. Zhang, "A review of game theoretical models in cooperative advertising," in Supply-Chain Management: Theories, Activities/Functions and Problems, 2011, pp. 193-226.
  • Aust and U. Buscher, "Cooperative advertising models in supply chain management: A review," European Journal of Operational Research, vol. 234, no. 1, pp. 1–14, 2014.
  • Singh and X. Vives, "Price and Quantity Competition in a Differentiated Duopoly," The RAND Journal of Economics, vol. 15, no. 4, pp. 546-554, 1984, doi: 10.2307/2555525.
  • Aust and U. Buscher, "Vertical cooperative advertising in a retailer duopoly," Computers and Industrial Engineering, vol. 72, no. 1, pp. 247-254, 2014, doi: 10.1016/j.cie.2014.03.023.
  • Singh and X. Vives, "Price and quantity competition in a differentiated duopoly," The RAND Journal of Economics, pp. 546-554, 1984.
  • F. Daughety, Cournot oligopoly: characterization and applications. Cambridge University Press, 2005.
Journal of Industrial Engineering Research in Production Systems
Volume 11, Issue 22
September 2023
Pages 159-169

Files

Share

How to cite

Statistics