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The Price of Anarchy in Supply Chain Networks: Quantifying the Efficiency Loss of Network Equilibria

Published: 15 October 2024 Publication History

Abstract

For the seminal model proposed by Nagurney, Dong and Zhang [1], we directly apply optimization theory and game theory to analyze equilibrium conditions for the decentralized and centralized supply chain network, without applying variational inequality theory. Then after, the price of anarchy (PoA) in supply chain network is defined and numerically analyzed. Sensitivity analysis shows diversified propositions.

References

[1]
NAGURNEY A, DONG J, ZHANG D. A supply chain network equilibrium model [J]. Transportation Research Part E, 2002, 38(281-303.
[2]
KOUTSOUPIAS E, PAPADIMITRIOU C H. Worst-case equilibria; proceedings of the STACS 99 : 16th Annual Symposium on Theoretical Aspects of Computer Science Trier, Berlin, Heidelberg, F, 1999 [C]. Springer Berlin Heidelberg.
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KOUTSOUPIAS E, PAPADIMITRIOU C H. Worst-case equilibria [J]. Computer Science Review, 2009, 3(2): 65-9.
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PAPADIMITRIOU C H. Algorithms, games, and the internet; proceedings of the the 33rd Annual ACM Symposium on the Theory of Computing, Hersonissos, Crete, Greece, F July 6-8, 2001 [C].
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PERAKIS G, ROELS G. The price of anarchy in supply chains: Quantifying the efficiency of price-only contracts [J]. Management Science, 2007, 53(8): 1249–68.
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MA Z J, YE Y S, DAI Y. Quantifying the price of anarchy in reverse supply chains [J]. Journal of Management Sciences in China, 2016, 19(2): 66-73.
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YE Y-S, MA Z-J, DAI Y. The price of anarchy in competitive reverse supply chains with quality-dependent price-only contracts [J]. Transportation Research Part E: Logistics and Transportation Review, 2016, 89(86-107.
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MA Z J, YE Y S, DAI Y, The price of anarchy in closed‐loop supply chains [J]. International Transactions in Operational Research, 2019, 29 (1): 624-56.
[9]
HOU H, LI Y, WANG Q. The Price of Anarchy in the Retailer's Dual-channel Supply Chain: Dominant Structure and Efficiency Loss; proceedings of the 2021 9th International Conference on Traffic and Logistic Engineering (ICTLE), F 9-11 Aug. 2021, 2021 [C].
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ZHOU X, LV N, YAO F, Review and prospect of the research on supply chain network equilibrium optimization [J]. Journal of Systems Engneering, 2022, 37(3): 375-96.
[11]
SAMUELSON P A. Spatial Price Equilibrium and Linear Programming [J]. The American Economic Review, 1952, 42(3): 283-303.
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[13]
MASCHLER M, SOLAN E, ZAMIR S. Game Theory [M]. 2nd ed. Cambridge Cambridge University Press, 2020.

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    IMMS '24: Proceedings of the 2024 7th International Conference on Information Management and Management Science
    August 2024
    465 pages
    ISBN:9798400716997
    DOI:10.1145/3695652
    Permission to make digital or hard copies of all or part of this work for personal or classroom use is granted without fee provided that copies are not made or distributed for profit or commercial advantage and that copies bear this notice and the full citation on the first page. Copyrights for components of this work owned by others than the author(s) must be honored. Abstracting with credit is permitted. To copy otherwise, or republish, to post on servers or to redistribute to lists, requires prior specific permission and/or a fee. Request permissions from [email protected].

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    Published: 15 October 2024

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