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A Game‐Theoretic Approach to Quantity Discount Problems *
Author(s) -
Chiang WenChyuan,
Fitzsimmons James,
Huang Zhimin,
Li Susan X.
Publication year - 1994
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.1994.tb00521.x
Subject(s) - stackelberg competition , mathematical economics , pareto principle , pareto optimal , game theory , perspective (graphical) , computer science , mathematical optimization , economics , multi objective optimization , mathematics , artificial intelligence
The traditional quantity discount problem is analyzed from the perspective of game theory, including both noncooperative and cooperative models. For the noncooperative case, the Stackelberg equilibrium is derived. For the cooperative case, the Pareto Optimality criteria are used to find a group of optimal strategies. Both scenarios are illustrated through an example which quantifies the benefits resulting from cooperation between the buyer and the seller for game‐theoretic solutions using geometric programming.