Stackelberg competition

About: Stackelberg competition is a research topic. Over the lifetime, 6611 publications have been published within this topic receiving 109213 citations.

Leader–follower game in vendor-managed inventory system with limited production capacity considering wholesale and retail prices

Abstract: Vendor-managed inventory (VMI) is a widely used co-operative inventory policy in supply chains in which each enterprise has its autonomy in pricing. In this paper, a leader–follower Stackelberg game in a VMI supply chain is discussed where the manufacturer, as a leader, produces a single product with a limited production capacity and delivers it at a wholesale price to multiple different retailers, as the followers, who then sell the product in dispersed and independent markets at retail prices. An algorithm is then developed to determine the equilibrium of the Stackelberg game. Finally, a numerical study is conducted to understand the influence of the Stackelberg equilibrium and market-related parameters on the profits of the manufacturer and its retailers. Through a numerical example, our research demonstrates that: (a) the market-related parameters have significant influence on the manufacturer's and its retailers' profits; (b) a retailer's profit may not necessarily be lowered when it is charged with ...

Multi-period channel coordination in vendor-managed inventory for deteriorating goods

Abstract: This study examines the problem of optimally dynamic joint decisions, including replenishment scheduling/quantity, retail price, wholesale price, and revenue-sharing allocation, in a vertically decentralised single-manufacturer Stackelberg and single-retailer channel over a multi-period planning horizon, subject to deteriorating goods and multivariate demand function. This study uses a calculus-based formulation combined with dynamic programming techniques to solve the channel coordination decision problem. Additionally, three arrangements, namely price-only contract, revenue-sharing contract, and revenue-sharing plus linear rebate and side-payment contract for channel coordination, are developed under retailer-managed inventory (RMI) and vendor-managed inventory (VMI) systems, respectively. The analysis reveals that the proposed policy under the VMI system with the revenue-sharing plus linear rebate and side-payment contract tends to obtain low retail prices and large demand quantity, and results in near...

A review of dynamic Stackelberg game models

Abstract: Dynamic Stackelberg game models have been used to study sequential decision making in noncooperative games in various fields. In this paper we give relevant dynamic Stackelberg game models, and review their applications to operations management and marketing channels. A common feature of these applications is the specification of the game structure: a decentralized channel consists of a manufacturer and independent retailers, and a sequential decision process with a state dynamics. In operations management, Stackelberg games have been used to study inventory issues, such as wholesale and retail pricing strategies, outsourcing, and learning effects in dynamic environments. The underlying demand typically has a growing trend or seasonal variation. In marketing, dynamic Stackelberg games have been used to model cooperative advertising programs, store brand and national brand advertising strategies, shelf space allocation, and pricing and advertising decisions. The demand dynamics are usually extensions of the classic advertising capital models or sales-advertising response models. We begin each section by introducing the relevant dynamic Stackelberg game formulation along with the definition of the equilibrium used, and then review the models and results appearing in the literature.