Implementation of optimal schedules in outsourcing with identical suppliers

Herbert Hamers, Flip Klijn and Marco Slikker
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Herbert Hamers: Tilburg University
Marco Slikker: Eindhoven University of Technology

Mathematical Methods of Operations Research, 2019, vol. 89, issue 2, No 2, 173-187

Abstract: Abstract This paper deals with decentralized decision-making situations in which firms outsource production orders to multiple identical suppliers. Each firm aims to minimize the sum of its completion times. We study whether a central authority can install a mechanism such that strategic interaction leads to a socially optimal schedule. For the case of single demand the shortest-first mechanism implements optimal schedules in Nash equilibrium. We show that for the general case there exists no anonymous mechanism that implements optimal schedules in correlated equilibrium.

Keywords: Game theory; Outsourcing; Scheduling; Efficiency; Implementation; Nash equilibrium; Correlated equilibrium; Price of stability (search for similar items in EconPapers)
JEL-codes: C72 D71 D82 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s00186-018-0645-1

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