Evolutionary Game Dynamics for Financial Risk Decision‐Making in Global Supply Chain

Abstract

This paper focuses on the game evolution process and its influencing factors of financial risk cooperation behavior between suppliers and manufacturers in global supply chain system. Using two-population evolutionary game theory, the performance of supply chain members under financial risk environment is modeled. Further, the proposed financial risk game model is applied to simulation cases of global supply chain. Based on the theory analysis and simulation results, it is shown that the cooperation strategy is the optimal evolutionarily stable strategy (ESS) for all supply chain members, when facing the high financial risk. The financial risksharing coefficient can be regarded as an adjuster that affects risk ESS of both suppliers and manufacturers under the low financial risk setting. By reducing the financial risk-sharing ratio of one supply chain player, his intention of adopting cooperation strategy would be enhanced. Finally, it is observed that financial risk sharing approach may lead to the alignment among supply chain members. Therefore, setting up an effective financial risk-sharing mechanism is beneficial to realize sustainable development of global supply chain.

Evolutionary Game Analysis of Three Players on Behavioural Strategy of P2P Lending Participants: A Sustainable Operations Perspective

“…Zhang et al analysed the investment decision process in cyber offender-defender interaction by an EGM [38]. Li et al used the two-player EGM to simulate the performance of supply chain members under the environment of financial risk [39]. Yang and Fu constructed an EGM to analyse the equilibrium strategies of inclusive financial institutions and the poor in poverty-reduction activities [40].…”

“…us, it is necessary to understand the interest and interactions of P2P lending participants to coordinate the interest among them for achieving sustainable development of the P2P lending industry. (3) According to the aforementioned literature, the EGM of two game groups or two players is often applied in studies [20,[36][37][38][39][40]. However, practical cases usually involve more than two participants.…”

An Evolutionary Game Model to Study Manufacturers and Logistics Companies’ Behavior Strategies for Information Transparency in Cold Chains

“…Issues Populations [37] Behavior strategies triggering green practices Producers, retailers [38] Remanufacturing closed-loop supply chain Manufacturers, retailers [39] Green SCM diffusion Governors, enterprises [40] Long-term green purchasing relationships Suppliers, manufacturers [41] Energy source selection Government, power plants [42] Low-carbon investment strategies Suppliers, manufacturers [43] Financial risk cooperation behaviors Suppliers, manufacturers [44] Sustainability and government intervention Governors, producers [45] Wholesale-retail pricing strategies Manufacturer, retailers [46] Cooperation relationships and tendency Constructors, suppliers [47] Remanufacturers competing for leadership Manufacturers, retailers [48] Green investment strategies with subsidy Manufacturers, suppliers [49] Low-carbon behaviors, strategies, and policies Retailers, manufacturers [50] Knowledge-sharing behavior and alliance Construction enterprises [51] Green production and financial intervention Suppliers, manufacturers, and governments 4 Mathematical Problems in Engineering manufacturer (β) and the logistics service provider…”

Supply Chain Logistics Information Collaboration Strategy Based on Evolutionary Game Theory

“…Reference [65] uses an evolutionary game framework to investigate how to optimize the strategy of low carbon investment for suppliers and manufacturers in supply chains, and discusses the impacts on ESS. Using two-population EGT, reference [66] models the performance of supply chain members under the financial risk environment, and uses the proposed model to simulate the case of the global supply chain. Reference [67] probes into the coordination of service quality of the port service supply chain by establishing an evolutionary game model.…”