Collaboration agreements in supply chains in emerging markets - Game theory approach.
Location
SU-215
Start Date
1-5-2026 10:30 AM
Department
Management and Marketing
Abstract
Organizations and managers must actively manage asymmetric relationships to prevent their disappearance. We propose that the best way to find solutions for problems related to managers and organizations operating under asymmetrical pressure is by using game theory concepts and tools. Game theory is concerned with the analysis of situations involving conflict, cooperation, and decision-maker (players) interactions (Leng and Parlar, 2005). These relationships correspond to decentralized forms of supply chains that are frequent in today’s reality. This type of supply chain is characterized by the presence of multiple independent decision-making processes, with different players and varying tactics, roles, and scenarios (Stewart & Fenn, 2006). In centralized networks where a unique decision-maker defines the optimum solution and coordinates the activities of participants to achieve better results, the application of game theory is not viable (Leng & Parlar, 2005). Game theory applies cooperative and non-cooperative games to solve problems related to conflict, cooperation, and decision-making processes. Cooperative games are developed in a scenario where partner organizations enjoy good communication, and leaders reach agreements on improving overall benefits and effectiveness of the supply chain. Managers act rationally to achieve goals by achieving overall objectives established by consensus (Carter, 1993), a typical scenario for symmetric relationships. Under asymmetries, it is more appropriate to apply non-cooperative games. The theory of non-cooperative games studies behaviors of participants who try to maximize individual goals in competitive situations characterized by a lack of communication or when one partner takes on a leadership position while other partners moderate decisions, seeking improvement in this new scenario (Wang & Parlar, 1989). When considered through a game theory lens, firms will likely seek to solve conflicts and manage asymmetries through cooperation, though it obligates rules negotiation, forms, and methods of carrying out cooperative agreements. A partner’s cooperation could be appropriate in cases of conflict where managers do not control factors that influence performance, do not control conflicts of interest, and do not manage the relationships that are affected by asymmetries (Taylor, 2004). Naturally, such solutions can only be achieved if managers in each stage of the SCM process agree to cooperate.
Faculty Sponsor
Marek Michalski
Collaboration agreements in supply chains in emerging markets - Game theory approach.
SU-215
Organizations and managers must actively manage asymmetric relationships to prevent their disappearance. We propose that the best way to find solutions for problems related to managers and organizations operating under asymmetrical pressure is by using game theory concepts and tools. Game theory is concerned with the analysis of situations involving conflict, cooperation, and decision-maker (players) interactions (Leng and Parlar, 2005). These relationships correspond to decentralized forms of supply chains that are frequent in today’s reality. This type of supply chain is characterized by the presence of multiple independent decision-making processes, with different players and varying tactics, roles, and scenarios (Stewart & Fenn, 2006). In centralized networks where a unique decision-maker defines the optimum solution and coordinates the activities of participants to achieve better results, the application of game theory is not viable (Leng & Parlar, 2005). Game theory applies cooperative and non-cooperative games to solve problems related to conflict, cooperation, and decision-making processes. Cooperative games are developed in a scenario where partner organizations enjoy good communication, and leaders reach agreements on improving overall benefits and effectiveness of the supply chain. Managers act rationally to achieve goals by achieving overall objectives established by consensus (Carter, 1993), a typical scenario for symmetric relationships. Under asymmetries, it is more appropriate to apply non-cooperative games. The theory of non-cooperative games studies behaviors of participants who try to maximize individual goals in competitive situations characterized by a lack of communication or when one partner takes on a leadership position while other partners moderate decisions, seeking improvement in this new scenario (Wang & Parlar, 1989). When considered through a game theory lens, firms will likely seek to solve conflicts and manage asymmetries through cooperation, though it obligates rules negotiation, forms, and methods of carrying out cooperative agreements. A partner’s cooperation could be appropriate in cases of conflict where managers do not control factors that influence performance, do not control conflicts of interest, and do not manage the relationships that are affected by asymmetries (Taylor, 2004). Naturally, such solutions can only be achieved if managers in each stage of the SCM process agree to cooperate.