Game Theoretic Modeling of Horizontal Supply Chain Coopetition among Growers

Tiru Arthanari (), David Carfì () and Francesco Musolino ()
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Tiru Arthanari: Department of Information Systems and Operations Management, University of Auckland, Owen G Glenn Building, 12 Grafton Road, Auckland, New Zealand
Francesco Musolino: PISRS — Permanent International Session of Research Seminars, University of Messina, Messina, 98122, Italy

International Game Theory Review (IGTR), 2015, vol. 17, issue 02, 1-22

Abstract: Horizontal supply chains is the term used when suppliers competing at a particular level of the chain form a coalition to benefit from their cooperation rather than the usual competitive strategies used by them to become part of the supply chain. Such horizontal cooperation among competitors is studied by Wood, using qualitative research methodology, based on case studies done in New Zealand. The term "coopetition" is used in the literature to describe such a cooperative behavior among competitors. In this paper we examine the coopetition phenomenon from a game theoretic perspective and give a model that brings out the equilibria that will lead to optimal participation among the coalition partners. The model considers a set of growers who can choose to form a coopetitive alliance to market their production in some external regions, while competing within the internal regions. By means of a general analytical framework of competition, we show the strategies that could provide solutions, in a coopetitive perspective, for the growers. These solutions offer a win–win outcome for the growers, letting them share the pie fairly within a growth path of games. We determine the proportion of resources they'll use and how the gain will be shared.

Keywords: Horizontal supply chain; game theory; coopetition; 91A80; 91A35; 91B26; 90B50; C70; D53; F00; G01; G21; M20 (search for similar items in EconPapers)
JEL-codes: B4 C0 C6 C7 D5 D7 M2 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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DOI: 10.1142/S0219198915400137

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