Strategic Behavior in a Serial Newsvendor

Nicole Perez Becker (), Benny Mantin () and Joachim Arts
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Nicole Perez Becker: LCL, Université du Luxembourg
Benny Mantin: LCL, Université du Luxembourg

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: We study the interaction between an upstream seller and an intermediate buyer, both of whom face uncertainty related to downstream demand, over a two-period horizon. The buyer replenishes every period, whereas the seller has only one ordering opportunity at the beginning of the horizon. Since both agents make quantity decisions before demand realizes, they face demand mismatch risks and have incentives to limit these risks through their quantity decisions. We study the effects of varying degrees of buyer strategic behavior on inventory decisions and seller profitability.

Keywords: Strategic consumers; multi-unit purchases; inventory games. (search for similar items in EconPapers)
JEL-codes: C73 D24 M11 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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Persistent link: https://EconPapers.repec.org/RePEc:luc:wpaper:22-02

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