Partition-Form Cooperative Games in Two-Echelon Supply Chains

Gurkirat Wadhwa, Tushar Walunj, Veeraruna Kavitha

2024

Abstract

Competition and cooperation are inherent features of any multi-echelon supply chain. The interactions among the agents across the same echelon and that across various echelons influence the percolation of market demand across echelons. The agents may want to collaborate with others in pursuit of attracting higher demand and thereby improving their own revenue. We consider one supplier (at a higher echelon) and two manufacturers (at a lower echelon and facing the customers) and study the collaborations that are ‘stable’; the main differentiator from the existing studies in supply chain literature is the consideration of the following crucial aspect – the revenue of any collaborative unit also depends upon the way the opponents collaborate. Such competitive scenarios can be modeled using what is known as partition form games. Our study reveals that the grand coalition is not stable when the product is essential and the customers buy it from any of the manufacturers without a preference. The supplier prefers to collaborate with only one manufacturer, the one stronger in terms of market power; further, such collaboration is stable only when the stronger manufacturer is significantly stronger. Interestingly, no stable collaborative arrangements exist when the two manufacturers are nearly equal in market power.

Paper Citation

in Harvard Style

Wadhwa G., Walunj T. and Kavitha V. (2024). Partition-Form Cooperative Games in Two-Echelon Supply Chains. In Proceedings of the 13th International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES; ISBN 978-989-758-681-1, SciTePress, pages 158-170. DOI: 10.5220/0012432600003639

in Bibtex Style

@conference{icores24,
author={Gurkirat Wadhwa and Tushar Walunj and Veeraruna Kavitha},
title={Partition-Form Cooperative Games in Two-Echelon Supply Chains},
booktitle={Proceedings of the 13th International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES},
year={2024},
pages={158-170},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0012432600003639},
isbn={978-989-758-681-1},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 13th International Conference on Operations Research and Enterprise Systems - Volume 1: ICORES
TI - Partition-Form Cooperative Games in Two-Echelon Supply Chains
SN - 978-989-758-681-1
AU - Wadhwa G.
AU - Walunj T.
AU - Kavitha V.
PY - 2024
SP - 158
EP - 170
DO - 10.5220/0012432600003639
PB - SciTePress