Multi-Oligopoly Sequential Pricing Mechanisms and Their Game Analysis in Raw Material Supply Chains

Huilin Yao, Rizhao Gong and Zhihui Yuan ()
Additional contact information
Huilin Yao: School of Business, Hunan University of Science and Technology, Xiangtan 411201, China
Rizhao Gong: School of Business, Hunan University of Science and Technology, Xiangtan 411201, China
Zhihui Yuan: School of Electrical and Information Engineering, Changsha University of Science and Technology, Changsha 410114, China

Sustainability, 2022, vol. 14, issue 23, 1-21

Abstract: The sequential pricing game model is an approach that can be effectively used to solve the problem with multi-oligopoly pricing mechanisms in raw material supply chains. However, the existing sequential pricing mechanism does not fully consider constraints such as the purchase volume of downstream firms and the change information of each parameter, which leads to the pricing mechanism being detached from the real market. According to the concept of the sequential pricing game model being used among multi-oligopolies under constraints, we constructed the constrained sequential pricing game model by incorporating the parameters related to the product demand function, marginal production cost, dominant coefficient, following coefficient, and agreed minimum purchase volume as constraints, and the model was converted into a nonlinear bilevel programming model to facilitate model solving. Furthermore, we provided the analytical solution formulas for six special cases, thus making the model more similar to the real market. In addition, the effects of the agreed minimum purchase volume and the dominant and following coefficients on the equilibrium quoted prices and profits of the firms were analyzed. The results of the numerical simulation show that the constrained sequential pricing game model is more effective than the unconstrained sequential pricing game model in solving the problem with the multi-oligopoly pricing mechanism, which means that it can be used to establish a better pricing mechanism and provide a more reasonable and scientific basis for market operation and policymakers in solving practical problems.

Keywords: pricing mechanism; sequential pricing game; dynamic games; supply chains (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2071-1050/14/23/16231/pdf (application/pdf)
https://www.mdpi.com/2071-1050/14/23/16231/ (text/html)

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:gam:jsusta:v:14:y:2022:i:23:p:16231-:d:994121

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().