HEC Montréal, Canada, May 2 - 4, 2011

2011 Optimization Days

HEC Montréal, Canada, 2 — 4 May 2011

Schedule Authors My Schedule

TC9 Théorie des jeux et applications III / Game Theory and Applications III

May 3, 2011 03:30 PM – 05:10 PM

Location: Ordre des CGA du Québec

Chaired by Pietro De Giovanni

4 Presentations

  • 03:30 PM - 03:55 PM

    The Game Theoretical Effects of Border Tax Adjustments

    • Terry Eyland, presenter, GERAD, Bishop's University
    • Georges Zaccour, Chair in Game Theory and Management, GERAD and HEC Montréal

    The model looks at the optimization of two different governments and their respective firms. A Border Tax Adjustment (BTA) parameter is modeled to represent by how much in percentage a country may adjust for differing carbon taxation policies. Results find that a BTA parameter of 50 percent yields the highest total welfare.

  • 03:55 PM - 04:20 PM

    Effects of Vertical Mergers from a Dynamic Point of View

    • Michael Grothe, presenter, Bielefeld University
    • Herbert Dawid, Bielefeld University

    In addition to an efficiency effect, vertical mergers also have a competitive effect. Mergers are long-run decisions and we study how both effects evolve over time. For this reason we use a non-cooperative differential game for three different vertical structures. The model sheds light on the effect of a vertical merger on process innovation, output and price.

  • 04:20 PM - 04:45 PM

    An Assessment of Contracts’ Coordinating Power in Supply Quality Management

    • Fouad El Ouardighi, presenter, ESSEC Business School
    • Konstantin Kogan, Bar-Ilan University

    We consider a two-echelon supply chain involving one manufacturer and one supplier who collaborate on improving both design and conformance quality. We show that although a revenue-sharing contract enables the manufacturer to effectively involve the supplier in quality improvement, it does not allow for perfect coordination resulting in the quality that can be achieved by a cooperative supply chain. We thus suggest a reward-based extension to the standard revenue-sharing contract, to ensure system-wide optimal quality performance. Importantly, we find that the supplier would be better off adopting a reward-based revenue sharing contract and refusing a standard revenue-sharing contract, while the opposite would be true for the manufacturer.

  • 04:45 PM - 05:10 PM

    Overcoming the Drawbacks of a Revenue-Sharing Contract Through a Coop Program

    • Pietro De Giovanni, presenter, NOVA School of Business and Economics
    • Maria Roselli, Universita' degli Studi di Pavia

    In a marketing channel, shifting from a wholesale price contract to a revenue sharing contract (RSC) is not payoff-Pareto-improving because the retailer is myopic. We demonstrate that offering a support program lessens the negative effects that a RSC creates.