Pricing and the News Vendor Problem: a Review with Extensions
Operations Research
A General Framework for the Study of Decentralized Distribution Systems
Manufacturing & Service Operations Management
A Three-Stage Model for a Decentralized Distribution System of Retailers
Operations Research
Formation of Alliances in Internet-Based Supply Exchanges
Management Science
Resource Flexibility with Responsive Pricing
Operations Research
Biform Analysis of Inventory Competition
Manufacturing & Service Operations Management
A Bargaining Framework in Supply Chains: The Assembly Problem
Management Science
Coalition Stability in Assembly Models
Operations Research
Cost Allocation for Joint Replenishment Models
Operations Research
A Stochastic Programming Duality Approach to Inventory Centralization Games
Operations Research
Inventory Centralization Games with Price-Dependent Demand and Quantity Discount
Operations Research
Alliance Formation Among Perfectly Complementary Suppliers in a Price-Sensitive Assembly System
Manufacturing & Service Operations Management
Negotiation policies and coalition tools in e-marketplace environment
Computers and Industrial Engineering
Strategic alliance via co-opetition: Supply chain partnership with a competitor
Decision Support Systems
Large-Scale Service Marketplaces: The Role of the Moderating Firm
Management Science
Coalition formation based on marginal contributions and the Markov process
Decision Support Systems
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In this paper, we study dynamic alliance formation among agents in competitive markets. We look at n agents selling substitutable products competing in a market. In this setting, we examine models with deterministic and stochastic demand, and we use a two-stage approach. In Stage 1, agents form alliances (coalitions), and in Stage 2, coalitions make decisions (price and inventory) and compete against one another. To analyze the stability of coalition structures in Stage 1, we use two notions from cooperative games---the largest consistent set (LCS) and the equilibrium process of coalition formation (EPCF)---which allow players to be farsighted. Thus, in forming alliances, players consider two key phenomena: First, players trade off the size of the total profit of the system versus their allocation of this total pie, and second, they weigh the possibility that an immediate beneficial defection can trigger further counter defections that in the end may prove to be worse than the status quo. In particular, one such example is that of the grand coalition---which we show to be stable in the farsighted sense---even though players benefit myopically by defecting from it. We also provide conditions under which a situation of a few lone players competing against a large coalition is stable. We examine the impact of the size of the market (n), the degree of competition, the effect of cost parameters, and the variability of the demand process on the prices, inventory levels, and structure of the market. We discuss the possible strategic implications of our results to firms in a competitive market and for new entrants.