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OR Spectrum

, Volume 35, Issue 4, pp 1059–1084 | Cite as

A dynamic game with monopolist manufacturer and price-competing duopolist retailers

  • Fouad El OuardighiEmail author
  • Steffen Jørgensen
  • Federico Pasin
Regular Article

Abstract

The paper considers a dynamic game with a single manufacturer who supplies two retailers. The manufacturer determines his production rate of a specific product, the rate of quality improvement efforts as well as the rate of advertising for the product. Each retailer controls her purchasing rate and the consumer sales price. Payments from a retailer to the manufacturer are determined by a wholesale price or a revenue-sharing scheme. The retailers operate in the same consumer market in which they compete in prices for the consumer demand. Nash equilibrium conditions are derived and numerical methods are employed to characterize equilibrium behavior of the players in a differential game of fixed and finite duration.

Keywords

Operations management Marketing Supply chain management Differential games 

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Copyright information

© Springer-Verlag 2012

Authors and Affiliations

  • Fouad El Ouardighi
    • 1
    Email author
  • Steffen Jørgensen
    • 2
  • Federico Pasin
    • 3
  1. 1.Department of Operations ManagementESSEC Business SchoolCergy PontoiseFrance
  2. 2.Department of Business and EconomicsUniversity of Southern DenmarkOdenseDenmark
  3. 3.Department of Logistics and Operations ManagementHEC MontrealMontréalCanada

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