The Sharing of Benefits from a Logistics Alliance Based on a Hub-Spoke Network: A Cooperative Game Theoretic Approach

Minyoung Yea, Seokhyun Chung, Taesu Cheong and Daeki Kim
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Minyoung Yea: Korea University Business School, Korea University, Seoul, Korea
Seokhyun Chung: School of Industrial Management Engineering, Korea University, Seoul, Korea
Taesu Cheong: School of Industrial Management Engineering, Korea University, Seoul, Korea
Daeki Kim: Korea University Business School, Korea University, Seoul, Korea

Sustainability, 2018, vol. 10, issue 6, 1-16

Abstract: This study investigates a strategic alliance as a horizontal cooperation in the logistics and transportation industries by considering various sharing rules with a cooperative game approach. Through forging a strategic alliance, carriers gain extra benefits from resource sharing and high efficiency resource utilization. In particular, our research focuses on the cost savings from using larger vehicles utilizing collective market demand and regarding them as benefits of cooperation. The model conceptualizes the characteristic function of cost savings by coalitions that take into account the hub-spoke network which is common in transportation services. To share the improved profits fairly between members, we use different allocation schemes: the Shapley value, the core center, the τ -value, and the nucleolus. By analyzing those cooperative game theoretic solutions employing an alliance composed of three carriers, we investigate whether satisfaction in this specific coalition provides an incentive for carriers to join such a coalition. Our results from the analysis, with respect to fair allocation schemes, provide a practical and academic foundation for further research.

Keywords: strategic alliance; cost allocation; cooperative game theory; logistics alliance (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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