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Optimal pricing and ordering digital goods under piracy using game theory

Author

Listed:
  • Ata Allah Taleizadeh

    (University of Tehran)

  • Mahsa Noori-daryan

    (University of Tehran)

  • Mohammad Reza Soltani

    (Islamic Azad University)

  • Reza Askari

    (Kharazmi University)

Abstract

In this paper, we consider a supply chain with a single manufacturer and two competing retailers. The manufacturer sells his digital goods, which may be pirated, to customers through a traditional and a digital retail channel. It is assumed that the manufacturer takes a leader role and the retailers follow it. We investigate the contracts that the manufacturer offers to the retailers and our goal is to find the optimal pricing and ordering decisions made by retailers and the best contract that includes maximum profit for the supply chain. Also, we study a numerical example and examine the proposed contracts. On the other hand, in the sensitivity analysis section, we analyze the impact of each parameter of the problem, in particular, the impact of piracy on the profit of supply chain members and decision variables.

Suggested Citation

  • Ata Allah Taleizadeh & Mahsa Noori-daryan & Mohammad Reza Soltani & Reza Askari, 2022. "Optimal pricing and ordering digital goods under piracy using game theory," Annals of Operations Research, Springer, vol. 315(2), pages 931-968, August.
    • Handle: RePEc:spr:annopr:v:315:y:2022:i:2:d:10.1007_s10479-021-04036-w
    DOI: 10.1007/s10479-021-04036-w
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    References listed on IDEAS

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