Optimal pricing and ordering digital goods under piracy using game theory

Ata Allah Taleizadeh (), Mahsa Noori-daryan (), Mohammad Reza Soltani () and Reza Askari ()
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Ata Allah Taleizadeh: University of Tehran
Mahsa Noori-daryan: University of Tehran
Mohammad Reza Soltani: Islamic Azad University
Reza Askari: Kharazmi University

Annals of Operations Research, 2022, vol. 315, issue 2, No 13, 968 pages

Abstract: Abstract In this paper, we consider a supply chain with a single manufacturer and two competing retailers. The manufacturer sells his digital goods, which may be pirated, to customers through a traditional and a digital retail channel. It is assumed that the manufacturer takes a leader role and the retailers follow it. We investigate the contracts that the manufacturer offers to the retailers and our goal is to find the optimal pricing and ordering decisions made by retailers and the best contract that includes maximum profit for the supply chain. Also, we study a numerical example and examine the proposed contracts. On the other hand, in the sensitivity analysis section, we analyze the impact of each parameter of the problem, in particular, the impact of piracy on the profit of supply chain members and decision variables.

Keywords: Pricing; Inventory; Revenue-sharing; Cost-sharing; Digital goods; Piracy; Game theory (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10479-021-04036-w

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