Analysis of industry equilibria in models with sustaining and disruptive technology

This paper analyzes a special type of technology evolution, referred to in the literature as disruptive technology vs. sustaining technology. In general, “old” products based on sustaining technology are perceived to be superior to the “new” ones based on disruptive technology. However, the latter have distinctive features that allow them to attract an exclusive set of customers. Examples include notebooks vs. netbooks, hard-disk drives vs. solid-state drives, laser printers vs. inkjet printers, etc. We consider a model with an established firm and an entrant firm that have heterogeneous product-offering capabilities: the established firm can offer either or both types of products, while the entrant firm can only offer new products. Firms make capacity, pricing, and quantity decisions that maximize their ex-ante profit. Within this framework, we analyze deterministic games with perfect information and stochastic games with uncertain valuation of the disruptive technology. Equilibrium decisions are discussed under various market conditions, as well as under dedicated vs. flexible capacity assumptions.     

Repeated newsvendor game with transshipments under dual allocations

We study a repeated newsvendor game with transshipments. In every period n retailers face a stochastic demand for an identical product and independently place their inventory orders before demand realization. After observing the actual demand, each retailer decides how much of her leftover inventory or unsatisfied demand she wants to share with the other retailers. Residual inventories are then transshipped in order to meet residual demands, and dual allocations are used to distribute residual profit. Unsold inventories are salvaged at the end of the period. While in a single-shot game retailers in an equilibrium withhold their residuals, we show that it is a subgame-perfect Nash equilibrium for the retailers to share all of the residuals when the discount factor is large enough and the game is repeated infinitely many times. We also study asymptotic behavior of the retailers’ order quantities and discount factors when n is large. Finally, we provide conditions under which a system-optimal solution can be achieved in a game with n retailers, and develop a contract for achieving a system-optimal outcome when these conditions are not satisfied.     

A collaborative decentralized distribution system with demand forecast updates

In this paper, we study inventory pooling coalitions within a decentralized distribution system consisting of a manufacturer, a warehouse (or an integration center), and n retailers. At the time their orders are placed, the retailers know their demand distribution but do not know the exact value of the demand. After certain production and transportation lead time elapses, the orders arrive at the warehouse. During this time, the retailers can update their demand forecasts.We first focus on cooperation among the retailers - the retailers coordinate their initial orders and can reallocate their orders in the warehouse after they receive more information about their demand and update their demand forecasts. We study two types of cooperation: forecast sharing and joint forecasting. By using an example, we illustrate how forecast sharing collaboration might worsen performance, and asymmetric forecasting capabilities of the retailers might harm the cooperation. However, this does not happen if the retailers possess symmetric forecasting capabilities or they cooperate by joint forecasting, and the associated cooperative games have non-empty cores.Finally, we analyze the impact that cooperation and non-cooperation of the retailers has on the manufacturer’s profit. We focus on coordination of the entire supply chain through a three-parameter buyback contract. We show that our three-parameter contract can coordinate the system if the retailers have symmetric margins. Moreover, under such a contract the manufacturer benefits from retailers’ cooperation since he can get a share of improved performance.     

Some remarks on substitution effects in sodalites

Some recent examples of substitution effects in the three partial structures of selected sodalites are presented. Framework-cation, and cage-cation substitution effects are discussed for the series |(Eu_xCa_2–x)₄(OH)₈|[(Al_2+xSi_1–x)₄O₂₄]-SOD, cage-anion substitutions for |Ca₈[(WO₄)_x(MoO₄)_1–x]₂|[Al₁₂O₂₄]-SOD. While in a first approximation decomposition into partial structures seems reasonable, it is shown that, however, effects arising from substitutions in one partial structure are not limited to it. This is due to the fact that three main interactions have to be considered, namely, cage-cation – framework, cage-anion – framework, and cage-cation – cage-anion interactions. These can be co-operative or competitive and may lead to structural frustrations.     

Game-theoretic analysis of cooperation among supply chain agents: Review and extensions

This paper surveys some applications of cooperative game theory to supply chain management. Special emphasis is placed on two important aspects of cooperative games: profit allocation and stability. The paper first describes the construction of the set of feasible outcomes in commonly seen supply chain models, and then uses cooperative bargaining models to find allocations of the profit pie between supply chain partners. In doing so, several models are analyzed and surveyed, and include suppliers selling to competing retailers, and assemblers negotiating with component manufacturers selling complementary components. The second part of the paper discusses the issue of coalition formation among supply chain partners. An exhaustive survey of commonly used stability concepts is presented. Further, new ideas such as farsightedness among supply chain players are also discussed and analyzed. The paper also opens some avenues of future research in applying cooperative game theory to supply chain management.