Stackelberg competition

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

A game theoretic model for coordination of single manufacturer and multiple suppliers with quality variations under uncertain demands

Abstract: In this paper, a game theoretic model for supply chain coordination problem is studied. The supply chain coordination problem involves one manufacturer and multi-suppliers with quality variations under demand uncertainty. The number of defective parts purchased from suppliers is unknown to the manufacturer while each supplier can determine the standard deviation of defective items. The relationship between the manufacturer and the suppliers is modelled by a non-cooperative game. The non-cooperative game model is analysed by the Stackelberg equilibrium where the manufacturer is regarded as a leader and the suppliers as followers. By deriving suppliers’ best response functions, the Stackelberg equilibrium under uncertainties is established. Sensitivity analysis is conducted to investigate the features of the proposed models with cost parameters. The results validate the derived managerial insights derived for the proposed model.

Mixed duopoly, inefficiency, and public ownership

Abstract: If a publicly-owned firm has a higher marginal cost than a private firm, partial public ownership may be welfare-improving, if the public firm acts is Stackelberg leader. If the private firm's marginal cost is private information a simple transfer function is truth-eliciting. If the stock market is efficient, the cost of renationalization is “small”.

Interactive bilevel multi-objective decision making

Abstract: From a perspective of non-linear bilevel multi-objective decision-making problem (BMDMP) of the leader-follower Stackelberg game, this paper presents a two-person bilevel multi-objective decision-making model and an interactive algorithm for solving the problem. The algorithm simplifies a BMDMP by transforming it into separate multi-objective decision-making problems at the upper- and lower-levels, thereby avoiding the difficulty associated with non-convex mathematical programming to arrive at an optimal solution. In addition, the authors put forward the satisfactoriness concept as the upper level decision maker's preference. The algorithm facilitates the interactive nature of bilevel multi-objective decision making for non-inferior solutions. Thus, the algorithm provides a way to solve BMDMP.

Necessary optimality conditions for Stackelberg problems

Abstract: First-order necessary optimality conditions are derived for a class of two-level Stackelberg problems in which the followers' lower-level problems are convex programs with unique solutions To this purpose, generalized Jacobians of the marginal maps corresponding to followers' problems are estimated As illustrative examples, two discretized optimum design problems with elliptic variational inequalities are investigated The theoretical results may be used also for the numerical solution of the Stackelberg problems considered by nondifferentiable optimization methods

Near-Optimal Pricing and Replenishment Strategies for a Retail/Distribution System

Abstract: This paper integrates pricing and replenishment decisions for the following prototypical two-echelon distribution system with deterministic demands. A supplier distributes a single product to multiple retailers, who in turn sell it to consumers. The retailers serve geographically dispersed, heterogeneous markets. The demand in each retail market arrives continuously at a constant rate, which is a general decreasing function of the retail price in the market. The supplier replenishes its inventory through orders (purchases, production runs) from a source with ample capacity. The retailers replenish their inventories from the supplier. We develop efficient algorithms to determine optimal pricing and replenishment strategies for the following three channel structures. The first is the vertically integrated channel, where the system-wide pricing and replenishment strategies are determined by a central planner whose objective is to maximize the system-wide profits. The second structure is that of a vertically integrated channel in which pricing and operational decisions are made sequentially by separate functional departments. The third channel structure is decentralized, i.e., the supplier and the retailers are independent, profit-maximizing firms with the supplier acting as a Stackelberg game leader. We apply our algorithms to a set of numerical examples to quantify the supply chain inefficiencies due to functional segregation or uncoordinated decision making in a decentralized channel. We also gain insight into systematic differences in the associated pricing and operational patterns.