A Review of Stackelberg Differential Game Models in Supply Chain Management

Proceedings of the Fourth IEEE International Conference on Service Systems and Service Management, China, June 9-11, 2007

6 Pages Posted: 6 Feb 2008 Last revised: 15 Feb 2009

See all articles by Xiuli He

Xiuli He

University of North Carolina at Charlotte

Genaro Gutierrez

University of Texas at Austin - Red McCombs School of Business

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management

Abstract

Over the last two decades, differential game (DG) models have been used extensively to study such issues in dynamic environments as competitive advertising and pricing for new products in the marketing literature, capacity investments in the energy industry, government's subsidy policy in new technology, and monetary and fiscal policies in economics. Recently, a number of papers have applied DGs to treat dynamic interactions between the channel members in decentralized supply chains. This review focuses on these applications. Specifically, we review papers that analyze dynamic retail-wholesale pricing strategies, joint slotting and pricing decisions to launch an innovative durable product, and investment in supply chain infrastructure. We consider Stackelberg equilibria as the solution concept for the games under consideration. We shall begin our review with an introduction to the basics of the Stackelberg DGs. We then summarize the important managerial insights obtained in each of the studies being reviewed. Finally, we point out future research avenues for applications of DGs in supply chain management.

Keywords: differential games, Stackelberg equilibrium, supply chain management, coordination, pricing

JEL Classification: C61, M31, M37, M31, M00, C71, C73

Suggested Citation

He, Xiuli and Gutierrez, Genaro and Sethi, Suresh, A Review of Stackelberg Differential Game Models in Supply Chain Management. Proceedings of the Fourth IEEE International Conference on Service Systems and Service Management, China, June 9-11, 2007 , Available at SSRN: https://ssrn.com/abstract=1089849

Xiuli He

University of North Carolina at Charlotte ( email )

9201 University City Boulevard
Charlotte, NC 28223
United States

Genaro Gutierrez

University of Texas at Austin - Red McCombs School of Business ( email )

Austin, TX 78712
United States

Suresh Sethi (Contact Author)

University of Texas at Dallas - Naveen Jindal School of Management ( email )

800 W. Campbell Road, SM30
Richardson, TX 75080-3021
United States

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