Industrial Engineering Journal ›› 2011, Vol. 14 ›› Issue (6): 10-15.

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On the Nash and Stackelberg Game among Multiple Supply Chains

  

  1. 1. School of Business Administration, South China University of Technology, Guangzhou 510640, China;
    2. School of Sciences, Hefei University of Technology, Hefei 230009, China
  • Online:2011-12-31 Published:2011-12-23

Abstract:  In this paper, the competition issue among multiple supply chains is addressed. The supply chain considered is composed of one manufacturer and one retailer. Both Nash and Stackelberg game models are developed for the problem. It is shown that there is a unique equilibrium for both models. For the twosupplychain scenario, the system profit obtained under different pricing strategy is compared between these two game models. It is found that, for supply chain 1, the profit of retailer, manufacturer, and the whole supply chain obtained under the Nash game is greater than that obtained under the Stackelberg game. This implies that anyone of the retailer, manufacturer, and the whole supply chain is willing to give up the firstmover advantage as a leader. However, in contrast to supply chain 1, for supply chain 2, anyone of the retailer, manufacturer, and the whole supply chain want to act as the follower and exert the latemover advantage.

Key words: competition of multisupply chains, game theory, Nash game, Stackelberg game