Dynamic Oligopolistic Competition with Uncertainty and Supply Disruption Effects

Parilina, E.M., Wrzaczek, S., & Zaccour, G. (2024). Dynamic Oligopolistic Competition with Uncertainty and Supply Disruption Effects. International Game Theory Review (IGTR) e2440009. 10.1142/S0219198924400097.

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We consider a finite-horizon discrete-time dynamic model of oligopolistic competition, with uncertain supply. The firms (retailers) make their decisions on quantities (sales) and orders of goods from a nonstrategic manufacturer taking into account uncertainty in demand parameters and available supply capacity. The retailers need to satisfy the joint available supply capacity constraint. The model is described as a game played over an event tree with given transition probabilities. We find a normalized equilibrium for the game with coupling constraints. The two-step procedure to find this equilibrium is described. We provide the necessary conditions of the equilibrium and examine different scenarios of uncertainties in the model by numerical simulations.

Item Type: Article
Uncontrolled Keywords: Disruption in supply; dynamic games played over event trees; retail competition; Rosen equilibrium
Research Programs: Economic Frontiers (EF)
Depositing User: Luke Kirwan
Date Deposited: 25 Mar 2024 08:16
Last Modified: 25 Mar 2024 08:16
URI: https://pure.iiasa.ac.at/19577

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