Game-Theoretic Analysis of Price-Match, Warranty, and Quality in a Vendor-Buyer Supply Chain

• In Event: SUPPLY CHAIN MANAGEMENT: Emerging Topics in Supply Chain Managament-1

Abstract

This study presents a game-theoretic analysis of price-match strategy, quality, and warranty service in a vendor-buyer supply chain. Cooperative and non-cooperative game theory models are explored to determine vendor and buyer optimal decisions. The numerical study illustrates when and how price-matching improves profits for vendors and buyers. The impact of quality and warranty on consumer demand and profit is also assessed, with and without the price-match strategy. The findings enhance understanding of pricing dynamics, quality considerations, and warranty services in supply chains, which can be used to guide industry practitioners to make more profitable and competitive decisions.

Authors

• Reza Maihami, Mercer University

• Ehsan Ahmadi, Mercer University