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Capacity sharing with different oligopolistic competition and government regulation in a supply chain

Junlong Chen, Xinran Xie and Jiali Liu

Managerial and Decision Economics, 2020, vol. 41, issue 1, 79-92

Abstract: This paper constructs a capacity sharing model in a supply chain to reveal the factors affecting equilibrium outcomes. The results show that improving the technical level lowers capacity charge and increases seller profits in any case. Product differentiation has uncertain impacts on equilibrium outcomes, which depend on government regulations and oligopolistic competition models. The improvement of supplier's fixed component of marginal costs improves capacity sharing charge and reduces profits and consumer surplus. The government regulations and oligopolistic competition model directly affect equilibrium outcomes and welfare distribution. Government capacity control helps improve social welfare, but the effect of government subsidies is uncertain.

Date: 2020
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