Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/34283
Title: Dynamic competitive newsvendors with service-sensitive demands
Authors: Liu, L
Shang, W
Wu, S
Keywords: Availability competition
Demand model
Dynamic game
Feedback Nash equilibrium
Order quantity structure
Service-sensitive demand
Stationary policy
Issue Date: 2007
Publisher: Informs
Source: Manufacturing and service operations management, 2007, v. 9, no. 1, p. 84-93 How to cite?
Journal: Manufacturing and Service Operations Management 
Abstract: When two firms compete for service-sensitive demands based on their product availability, their actions will affect the future market share reallocation. This problem was first studied by Hall and Porteus (2000) using a dynamic game model. We extend their work by incorporating a general demand model, which enables us to obtain properties that reveal the dynamics of the game and the behavior of the players. In particular, we provide conditions under which the market share of a firm has a positive value and give it an upper bound. We further extend the game competition model to an infinite-horizon setting. We prove that there exists a stationary equilibrium policy and that the dynamic equilibrium policy always converges to a stationary equilibrium policy. We demonstrate that demand patterns will dictate how firms compete rationally and show the likely outcomes of the competition.
URI: http://hdl.handle.net/10397/34283
DOI: 10.1287/msom.1060.0123
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