The evolution of cooperation in the supply chain on generalized networks with a single output

Sams Afif Nirjhor, Fangyue Liu and Mayuko Nakamaru

No 3679n_v1, SocArXiv from Center for Open Science

Abstract: A general supply chain is a division of labor of an arbitrary number of subtasks, which has asymmetric interactions among the subtask-holder groups. To sustain a supply chain, cooperation among the subtask-holders is a must. We construct a general network model of supply chain with a finite number of roles with a single output, where the supply of faulty products is possible and a supply chain never stops on the way. We consider that cooperators and defectors exist in each subtask-holder group in a supply chain; cooperators of a subtask-holder group pay a cost of cooperation to maintain and upgrade the quality of the product, defectors however do not pay any cost, and thus the product quality reduces. In some supply chains, more cooperators upgrade the quality of the product more, and players can obtain a better reputation defined as a bonus that is given to all players. We found that the supply chain with a bonus confronts the social dilemma. We make replicator equations of asymmetric games to investigate the evolution of cooperation in a supply chain. We found that not the benefit from supply but the cost of cooperation influences the dynamics. As a result, the network structure of the supply chain never influences the dynamics. Sanction on the defectors induces the evolution of cooperation and non-linear bonus functions promote co-existences of cooperator groups and defector groups. The bonus functions determine whether the length of the supply chain promotes the evolution of cooperation or not.

Date: 2025-04-24
New Economics Papers: this item is included in nep-gth, nep-mic and nep-net
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Persistent link: https://EconPapers.repec.org/RePEc:osf:socarx:3679n_v1

DOI: 10.31219/osf.io/3679n_v1

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