scholarly journals Bargaining Power Choices with Moral Hazard in a Supply Chain

2018 ◽  
Vol 2018 ◽  
pp. 1-9 ◽  
Author(s):  
Hongmei Guo ◽  
Shuiliang Gu ◽  
Yingsheng Su
Keyword(s):  
Numerical Simulation ◽  
Supply Chain ◽  
Moral Hazard ◽  
Power Allocation ◽  
Bargaining Power ◽  
Nash Bargaining ◽  
Supply Chain Contract ◽  
Nash Bargaining Game ◽  
Information Problem ◽  
Theoretical Results

A supply chain contract is established using a dynamic, Nash bargaining game which determines the optimal bargaining power allocation for the manufacturer, retailer, and society in an environment affected by moral hazard and irreversible investment. The results found that the manufacturer’s choice was to hold all bargaining power; however, due to the remaining information problem, the retailer still had a profit; in contrast, the retailer was only willing to give up bargaining power if the manufacturer’s profit was reserved. The optimal bargaining power allocation was found to be strongly related to the ability to convert and monitor technology, with the bargaining power gradually shifting to the manufacturer as the technology improved. A numerical simulation is given to examine the theoretical results.

Moral Hazard and Bargaining Power

2006 ◽  
Vol 7 (4) ◽  
pp. 463-470 ◽  
Author(s):  
Dominique Demougin ◽  
Carsten Helm
Keyword(s):  
Moral Hazard ◽  
Bargaining Power ◽  
Bargaining Game ◽  
Nash Bargaining ◽  
Principal Agent ◽  
Nash Bargaining Game ◽  
Risk Neutral ◽  
Low Levels

Abstract We introduce bargaining power in a moral hazard framework where parties are risk-neutral and the agent is financially constrained. We show that the same contract emerges if the concept of bargaining power is analyzed in either of the following three frameworks: in a standard principal-agent (P-A) framework by varying the agent’s outside opportunity, in an alternating offer game, and in a generalized Nash-bargaining game. However, for sufficiently low levels of the agent’s bargaining power, increasing it marginally does affect the equilibrium in the Nash-bargaining game, but not in the P-A model and in the alternating offer game.

Measuring Performance of a Three-Stage Network Structure Using Data Envelopment Analysis and Nash Bargaining Game: A Supply Chain Application

2018 ◽  
Vol 17 (05) ◽  
pp. 1429-1467 ◽  
Author(s):  
Mohammad Amirkhan ◽  
Hosein Didehkhani ◽  
Kaveh Khalili-Damghani ◽  
Ashkan Hafezalkotob
Keyword(s):  
Supply Chain ◽  
Data Envelopment Analysis ◽  
Nash Bargaining ◽  
Data Envelopment ◽  
Second Stage ◽  
Proposed Model ◽  
Nash Bargaining Game ◽  
Dea Models ◽  
Overall Efficiency

The issue of efficiency analysis of network and multi-stage systems, as one of the most interesting fields in data envelopment analysis (DEA), has attracted much attention in recent years. A pure serial three-stage (PSTS) process is a specific kind of network in which all the outputs of the first stage are used as the only inputs in the second stage and in addition, all the outputs of the second stage are applied as the only inputs in the third stage. In this paper, a new three-stage DEA model is developed using the concept of three-player Nash bargaining game for PSTS processes. In this model, all of the stages cooperate together to improve the overall efficiency of main decision-making unit (DMU). In contrast to the centralized DEA models, the proposed model of this study provides a unique and fair decomposition of the overall efficiency among all three stages and eliminates probable confusion of centralized models for decomposing the overall efficiency score. Some theoretical aspects of proposed model, including convexity and compactness of feasible region, are discussed. Since the proposed bargaining model is a nonlinear mathematical programming, a heuristic linearization approach is also provided. A numerical example and a real-life case study in supply chain are provided to check the efficacy and applicability of the proposed model. The results of proposed model on both numerical example and real case study are compared with those of existing centralized DEA models in the literature. The comparison reveals the efficacy and suitability of proposed model while the pitfalls of centralized DEA model are also resolved. A comprehensive sensitivity analysis is also conducted on the breakdown point associated with each stage.

scholarly journals Strategic Conditions for Opening an Internet Store and Pricing Policies in a Retailer-Dominant Supply Chain

2015 ◽  
Vol 2015 ◽  
pp. 1-15 ◽  
Author(s):  
Yonghong Cheng ◽  
Zhongkai Xiong
Keyword(s):  
Supply Chain ◽  
Bargaining Power ◽  
The Internet ◽  
Optimal Price ◽  
Numerical Examples ◽  
Pricing Policies ◽  
Equilibrium Prices ◽  
Multichannel Retailing ◽  
Dominant Retailer ◽  
Theoretical Results

To examine when the manufacturer and dominant retailer open their own Internet stores and how setting prices to ensure opening Internet stores are profitable. We consider a two-echelon supply chain with one manufacturer and one dominant retailer. The retailer has a physical store in a monopolist market. Depending on whether the Internet stores are opened successfully by them, we firstly obtain equilibrium prices and profits under four possible supply chain structures. Secondly, we identify several strategic conditions when it is optimal to open an Internet store for the manufacturer and dominant retailer and discuss its implications. It is interesting to note that multichannel retailing is not necessarily the best strategy for the dominant retailer. In addition, we investigate the impacts of problem parameters (the dominant retailer’s bargaining power and consumers’ disutility of purchasing a product from Internet store) on the manufacturer and dominant retailer’s pricing policies. We find that the manufacturer’s optimal price at her Internet store is not always being lower than the dominant retailer’s. Finally, we conduct numerical examples to illustrate the theoretical results.

scholarly journals Low carbon joint strategy and coordination for a dyadic supply chain with Nash bargaining fairness

2022 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Jianxin Chen ◽  
Lin Sun ◽  
Tonghua Zhang ◽  
Rui Hou
Keyword(s):  
Supply Chain ◽  
Cost Sharing ◽  
Bargaining Power ◽  
Unit Cost ◽  
Revenue Sharing ◽  
Nash Bargaining ◽  
Low Carbon ◽  
Joint Decision ◽  
Effort Level ◽  
Fairness Concern

<p style='text-indent:20px;'>In the paper, fairness concern criterion is utilized to explore the coordination of a dyadic supply chain with a fairness-concerned retailer (acting as a newsvendor), who is committed to low carbon efforts. Two models are developed for stochastic demand disturbances in the forms of multiplicative case and additive case, respectively. Firstly, the optimal joint decision of the retailer and the supply chain are proposed in two scenarios, i.e., decentralized decision and the centralized decision. Secondly, in order to realize channel coordination, the contract of revenue sharing combined with the mechanism of low-carbon cost sharing is designed. Moreover, the influences of the retailer's fairness concern and bargaining power on the joint decision and the contract parameters are also investigated. Finally, numerical examples are given to illustrate the theoretical results and some suggestions to supply chain management are also provided. The results show that the revenue sharing contract can make the supply chain achieved coordination with the cost sharing mechanism of low-carbon efforts. Furthermore, the optimal low-carbon effort level and ordering quantity decrease in terms of fairness-concerned parameter and Nash bargaining power parameter, which increases in unit cost. However, the optimal pricing makes the opposite change.</p>

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