Collective profitability in semi-competitive intermediation networks

Optimal Semi-Competitive Intermediation Networks

“…We start by reviewing our definition of collectively profitable intermediation processes [12]. Central to this definition is the concept of intermediation DAG.…”

“…Our preliminary results include a set of necessary and sufficient collective profitability conditions that must be satisfied by the vectors of limit prices and [12]. Here, we assume that these conditions hold, i.e., our DAG is collectively profitable, and we focus on studying the maximization of social welfare as mathematical optimization problem.…”

“…Last but not least, we chose appropriate values for the limit prices of the buyers and sellers. According to our theoretical results from [12], a necessary condition to guarantee collective profitability of an intermediation DAG is Observe that this choice guarantees that condition (21) holds. However condition (22) is only necessary, but not sufficient.…”

“…In our recent research work we are interested in the modelling and analysis of such complex business processes as semi-competitive intermediation networks. Our results on this subject are presented in papers [4,5] and synthesis paper [12] and refer to the following aspects of the problem: i) the introduction of a domain-independent process model, grounded on Directed Acyclic Graphs (DAG hereafter), and ii) the development of necessary and sufficient conditions that guarantee profitable pricing strategies of involved actors in the intermediation process.…”

“…However, we have noticed that actually intermediation networks are serving supply and distribution chains operating in semi-competitive, rather than competitive environment. This means that while participating agents are collaborating so that the underlying business process is supporting the service of its external customers, the agents are also self-interested with the goal to maximize both their immediate private revenue, as well as their longer-term welfare [12].…”