Evolutionary Game Analysis on Strategies in “Main Manufacturer–Supplier” Mode Considering Technology Docking and Price Concluding under Competition Condition

Abstract

This paper analyses the strategies of the substitutable suppliers competing to collaborate with a main manufacturer in "main manufacturer-supplier" (M-S) mode. In the research and development (R&D) of complex products, only one supplier can be chosen for one kind of part as a long-term collaboration partner with the manufacturer. The competition between substitutable suppliers focuses on the technology docking and price-concluding strategies. In this paper, one original supplier as the first-mover and one new supplier as the second-mover chose between the two strategies sequentially to compete for the collaborative preference of the manufacturer. We also took the delay cost brought by strategy changing into the consideration of the risks, which the suppliers and the manufacturer should prepare to share. With evolutionary game theory applied, we can conclude that the initial costs have little impact on suppliers' making decisions, while the initial prices are correlated with both suppliers' decision making. Results also show that hesitation and fluctuation periods exist in suppliers' decision making, which have a relationship with existing strategy conditions, initial prices, and the cost caused by modifying the part. These results provide practical and reasonable managerial implications for M-S collaboration.Mathematics 2019, 7, 1184 2 of 25 in the whole R&D process of the product, work together when problems arise in the production process, and share the risk [3]. For example, for Airbus 380, Airbus designed the drawings of spare parts, formulated technical specifications, and detailed interfaces between modules, while suppliers processed according to these drawings. Then, Airbus purchased spare parts and assembled them into the whole product without the knowledge of how the spare parts were made. Airbus only has to make sure that the spare parts fit the design parameters of the end product. How to manage the suppliers is a big challenge for the manufacturer. Besides, due to the complexity of the complex product itself as well as the R&D process, the collaboration risk and payoff, which should be shared by both the manufacturer and its suppliers, are very difficult, but practical, to quantitatively depict.Traditionally, due to the characteristic of single or small batch customization of complex products, the manufacturer chooses one supplier for one part of the product as a long-term partnership. Enhancing long-term strategic cooperative positions with suppliers is the best choice for the manufacturer of a complex product. However, increasing competition between alternative suppliers may arise for the manufacturer of a complex product. With the development of economy and society, material demand is developing towards multihabitation. Complex products are gradually developing towards more kinds of service needs. Manufacturers may gain more payoffs from services and support by changing their relationships with suppliers. For example, in order to ensure the reliability of the product and meet the high production sp...

The Evolutionary Game of Trust in Public-Private Partnership Project Networks

“…Li et al further studied ecological compensation in the Taihu Basin of China [40]. Evolutionary game theory also provides a practicable research tool for the study of patterns of cooperation among manufacturers and suppliers in supply chain management [41,42]. For PPP projects, during their long life-cycle, the government and private sector cooperate around a unified project goal.…”

An evolutionary game for the behavior of third-party evaluators in pension public-private partnership incorporating public participation

“…EGT is dedicated to research based on the idea that players cannot fully grasp the entirety of the information, and their decision-making will change based on updated knowledge 13,14 . This kind of game theory has achieved success in research on different social fields, such as vaccine dilemma 15 , sustainable energy development 16 , environmental pollution 17 , sustainable tourism 18 , rights 19 , and Social physics 20 .…”

Dual-Channel Pricing of Online Retail Based on Evolutionary Game Theory and Coevolutionary Algorithm

“…Literature [23] established a dual channel supply chain revenue model with retailers as the main body and found that the uncertainty of demand will affect channel pricing. Literature [24] established the demand function related to price and demand, compared the optimal pricing problem under the manufacturer Stackelberg game and the manufacturer retailer Bertrand game, and found that the manufacturer in the Bertrand game decision-making mode has the highest price. Literature [25][26][27][28][29][30][31] mainly constructed a closed-loop supply chain network equilibrium model based on the dynamic competition of retail enterprises and studied the behavior and equilibrium conditions of manufacturers, retailers, and demand market.…”