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Strategic Behavior in a Serial Newsvendor

Author

Listed:
  • Nicole Perez Becker

    (LCL, Université du Luxembourg)

  • Benny Mantin

    (LCL, Université du Luxembourg)

  • Joachim Arts

    (LCL, Université du Luxembourg)

Abstract

We study the interaction between an upstream seller and an intermediate buyer, both of whom face uncertainty related to downstream demand, over a two-period horizon. The buyer replenishes every period, whereas the seller has only one ordering opportunity at the beginning of the horizon. Since both agents make quantity decisions before demand realizes, they face demand mismatch risks and have incentives to limit these risks through their quantity decisions. We study the effects of varying degrees of buyer strategic behavior on inventory decisions and seller profitability

Suggested Citation

  • Nicole Perez Becker & Benny Mantin & Joachim Arts, 2022. "Strategic Behavior in a Serial Newsvendor," DEM Discussion Paper Series 22-02, Department of Economics at the University of Luxembourg.
    • Handle: RePEc:luc:wpaper:22-02
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    File URL: http://hdl.handle.net/10993/50560
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Strategic consumers; multi-unit purchases; inventory games.;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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