A Subgame Perfect Approach to a Multi-Period Stackelberg Game with Dynamic, Price-Dependent, Distributional-Robust Demand

Mahnaz Fakhrabadi () and Leif K. Sandal ()
Additional contact information
Mahnaz Fakhrabadi: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway, https://www.nhh.no/en/employees/faculty/mahnaz-fakhrabadi/
Leif K. Sandal: Dept. of Business and Management Science, Norwegian School of Economics, Postal: NHH , Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway, https://www.nhh.no/en/employees/faculty/leif-kristoffer-sandal/

No 2023/4, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science

Abstract: This paper investigates a multi-periodic channel optimization facing uncertain, price dependent, and dynamic demand. The picture of the market uncertainty is incomplete, and only the price and time-dependent mean and standard deviation are known and may depend on the price history. The actual demand distribution itself is unknown as is typically the case in real world problems. An algorithm finding the optimized decentralized channel equilibrium is developed when the downstream member optimizes her expected profit stream by a distributional-robust approach, and the upstream member (leader) considers it as the follower’s reaction function. The algorithm allows for strategic decisions whereby the current demand is scaled by the previous price setting.

Keywords: Multi-Periodic problem; Stochasticity; Stackelberg Game; Subgame Perfect Distributional-Robust Approach; Supply Chain Management; Price-History Dependent Dynamic Demand (search for similar items in EconPapers)
JEL-codes: C61 C62 C63 C72 C73 D81 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2023-03-22
New Economics Papers: this item is included in nep-com, nep-des, nep-gth, nep-ind and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://hdl.handle.net/11250/3059803 Full text (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hhs:nhhfms:2023_004

Access Statistics for this paper

More papers in Discussion Papers from Norwegian School of Economics, Department of Business and Management Science NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Stein Fossen ().