Price Setting on a Network

04/14/2019
by   Toomas Hinnosaar, et al.
0

Most products are produced and sold by supply chain networks, where an interconnected network of producers and intermediaries set prices to maximize their profits. I show that there exists a unique equilibrium in a price-setting game on a network. The key distortion reducing both total profits and social welfare is multiple-marginalization, which is magnified by strategic interactions. Individual profits are proportional to influentiality, which is a new measure of network centrality defined by the equilibrium characterization. The results emphasize the importance of the network structure when considering policy questions such as mergers or trade tariffs.

READ FULL TEXT
research
09/28/2020

Market Equilibrium in Multi-tier Supply Chain Networks

We consider a sequential decision model over multi-tier supply chain net...
research
04/25/2018

Flow Equilibria via Online Surge Pricing

We explore issues of dynamic supply and demand in ride sharing services ...
research
02/28/2020

Social Welfare and Price of Anarchy in Preemptive Priority Queues

Consider an unobservable M|G|1 queue with preemptive-resume scheduling a...
research
07/15/2020

Prophylaxis of Epidemic Spreading with Transient Dynamics

We investigate the containment of epidemic spreading in networks from a ...
research
03/26/2023

Dynamic Game of the Dual-Channel Supply Chain Under a Carbon Subsidy Policy

This study investigates the dynamic game behaviors of dual-channel suppl...
research
07/20/2019

Yield Uncertainty and Strategic Formation of Supply Chain Networks

How does supply uncertainty affect the structure of supply chain network...
research
06/12/2023

Differential Game Analysis for Cooperation Models in Automotive Supply Chain under Low-Carbon Emission Reduction Policies

In the context of reducing carbon emissions in the automotive supply cha...

Please sign up or login with your details

Forgot password? Click here to reset