A Game Theoretic Approach for Sensitive Information Sharing in Supply Chain

Xiaofeng Zhang, William K. Cheung, ZongWei Luo and Frank Tong
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Xiaofeng Zhang: Hong Kong Baptist University, China
William K. Cheung: Hong Kong Baptist University, China
ZongWei Luo: The University of Hong Kong, China
Frank Tong: Technologies Research Center, Hong Kong, China

International Journal of Applied Logistics (IJAL), 2010, vol. 1, issue 4, 1-12

Abstract: With the adoption of radio frequency identification (RFID) technology, information sharing among participants in a supply chain is greatly facilitated, raising privacy concerns on sharing sensitive information. Balancing the conflicts between the improvement of visibility and the decrease of sensitive information shared is paramount. In this paper, the authors propose a leader-follower game model called LFM to model the strategic game between buyer and supplier. A Stackelberg equilibrium state is then computed as the solution to this game model. The proposed approach exhibits better performance when compared with conventional optimization approaches via derivation in terms of the total information sharing level and the total gain acquired verified by the experiments. In the future, the authors will extend this approach to a more complex situation with more participants in a dynamic environment.

Date: 2010
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