Optimization on pricing and overconfidence problem in a duopolistic supply chain

Xu, Lei; Shi, Xiaoran; Du, Peng; Govindan, Kannan; Zhang, Zhenchao

doi:10.1016/j.cor.2018.04.003

Cited by 36 publications

(19 citation statements)

References 25 publications

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“…In short, overconfidence was the main factor that affected the retailer's optimal strategies of order quantity and sales effort in the decentralized supply chain. However, the above findings contradicted with the conclusions from a study conducted by Xu et al [16], which examined the effect of retailer's overconfidence on the supply chain, and the result suggested that a higher level of overconfident resulted in the lower ordering quantity.…”

Section: Effect Of Overconfidence and Fairness Concern On The Supply contrasting

confidence: 82%

“…Similarly, Liu et al [15] presented a two-period service capacity procurement model and found that a dynamic wholesale price mechanism could eliminate the negative effect of overconfidence. Xu et al [16] explored the effects of overconfidence on retailers in different games. Li [17] identified that overconfidence could reduce the double marginalization effect in a decentralized supply chain.…”

Section: 1mentioning

confidence: 99%

“…In order to explore research problems and compare optimal decision variables to the decentralized supply chain with behavioral preference analogs, we assumed that the decision maker was rational in the centralized supply chain. According to Xu et al [16], the stochastic demand function is as follows:…”

Section: Centralized Supply Chain Modelmentioning

confidence: 99%

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Supply Chain Decisions and Coordination under the Combined Effect of Overconfidence and Fairness Concern

et al. 2020

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The purpose of this study was to examine the joint effect of overconfidence and fairness concern on supply chain decisions and design contracts to achieve a win-win situation within the supply chain. For this study, a centralized supply chain model was established without considering the retailers’ overconfidence and fairness concern. Furthermore, the retailers’ overconfidence and fairness concerns were introduced into the decentralized supply chain, while the Stackelberg game model between the manufacturer and the retailer was built. Furthermore, an innovative supply chain contract, i.e., buyback contract, with promotional cost sharing was designed to achieve supply chain coordination along with overconfidence and fairness concern. Finally, a numerical analysis was also conducted to analyze the effect of overconfidence, fairness concern, and the validity of the contract. The principal findings of the study include the positive correlation between retailers’ overconfidence and optimal order quantity, sales effort, expected utility, and profit. Although the order quantity and sales efforts were not affected by the fairness concern of the retailer, the contract achieved coordination with a win-win outcome when the level of overconfidence and fairness concern was moderate.

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Section: Effect Of Overconfidence and Fairness Concern On The Supply contrasting

confidence: 82%

Section: 1mentioning

confidence: 99%

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Supply Chain Decisions and Coordination under the Combined Effect of Overconfidence and Fairness Concern

et al. 2020

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“…In a similar vein, they found that the more biased of two competing newsvendors is not necessarily destined to a smaller expected profit than its less biased competitor. Xu et al [35] analyzed the impact of the retailer's overconfidence on the supply chain performance. They considered a duopolistic market with uncertain demand where one overconfident retailer and one rational retailer compete in selling the same product.…”

Section: Literature Reviewmentioning

confidence: 99%

Inventory Financing with Overconfident Supplier Based on Supply Chain Contract

Jiang

Liu

2018

Mathematical Problems in Engineering

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Overconfidence is a universal psychological behavior. Overconfidence on demand awareness will have a significant impact on operation decisions. The supplier estimated the demand with excessive precision which influences the inventory financing decision-making deeply. We built the demand function based on the supplier’s overconfidence. Then we established the retailer, supplier, and the Bank’s profit function, respectively. Through the analysis of the bilevel Stackelberg game, we obtained the order quantity of the retailer with the capital constraint, the wholesale price of overconfident supplier, and the loan-to-value ratio of Bank, and we analyzed the influence of overconfidence on the decision variables. We have several findings as follows. First, the overconfidence makes the decisions of the retailer, supplier, and Bank deviate from the rational decisions. Second, the space of the market profit will affect the decision variables in the joint decision-making. Third, the financing supply chain (including the Bank and supply chain) should have a positive attitude towards the overconfidence of the supplier. Forth, in the joint decision-making, the supplier need determines the buyback price according to the capital demand; and in the decentralized decision-making, the supplier should try to use high buyback price strategy.

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“…Liu et al [16] studied the impact of dual overconfidence behaviour and demand updating on port service supply chain decision making. Xu et al [17] explored the impact of the logistics service provider' overconfidence behaviour on the decision making for a supply chain with demand surge.…”

Section: Introductionmentioning

confidence: 99%

Optimal Decision-making for Green Supply Chain Based on Overconfidence under the Carbon Emission Constraint

Zhao¹

2019

JESA

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In light of the combination of overconfident manufacturerrational retailergreen-preferring consumers, this paper establishes a Stackelberg game model under the carbon emission constraint, obtains the optimal green and emission reduction strategy and optimal pricing strategy in case of decentralized decision-making using the backward induction method, and further analyzes the impacts of the manufacturers' overconfidence and the consumers' green preference on the optimal decision and profit of the supply chain. According to the results of the study, under certain conditions, the low-carbon supply chain will no longer be "lowcarbon" and the carbon tax policy will be ineffective; over-confident manufacturers will reduce the investment in carbon emission reduction while increasing the wholesale price of unit products; rational retailers may expand the market demands for products at the expense of some of its profit margins; the profits of the supply chain system and its members are all negatively correlated with the manufacturer's overconfidence level, but positively correlated with the consumers' green preference level. Finally, the model is proved to be effective through example analysis, showing that it can provide some reference for relevant supply chain enterprises when they are making decisions on emission reduction investment.

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Optimization on pricing and overconfidence problem in a duopolistic supply chain

Cited by 36 publications

References 25 publications

Supply Chain Decisions and Coordination under the Combined Effect of Overconfidence and Fairness Concern

Supply Chain Decisions and Coordination under the Combined Effect of Overconfidence and Fairness Concern

Inventory Financing with Overconfident Supplier Based on Supply Chain Contract

Optimal Decision-making for Green Supply Chain Based on Overconfidence under the Carbon Emission Constraint

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