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Quality control game model in logistics service supply chain based on different combinations of risk attitude

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  • Liu, Weihua
  • Wang, Yijia

Abstract

The existing quality control studies of supply chain mostly only consider one member׳s risk attitude, and ignore the combination of two members׳ risk attitudes. Therefore, a discussion about different risk attitudes affect quality control game of supply chain especially in logistics service supply chain (LSSC) is required. A basic quality control game model (Model I) was established in a LSSC composed of a logistics service integrator (LSI) and a functional logistics service provider (FLSP). In this model, LSI can choose to provide quality supervision or not, and FLSP can choose to accomplish a task according to the quality contract or cheat. The mixed-strategy Nash equilibrium of Model I was presented. A new model (Model II) with different combinations of risk attitudes was then built based on Model I, and the new mixed-strategy Nash equilibrium was provided. The influences of various combinations of risk attitudes on LSI׳s supervision probability and FLSP׳s compliance probability were also discussed. Results show that the level of risk attitude of LSI and FLSP should not be unlimited, and an interval is existed respectively. LSI prefers risk-seeking FLSP in order to obtain smaller supervision possibility and larger compliance possibility.

Suggested Citation

  • Liu, Weihua & Wang, Yijia, 2015. "Quality control game model in logistics service supply chain based on different combinations of risk attitude," International Journal of Production Economics, Elsevier, vol. 161(C), pages 181-191.
  • Handle: RePEc:eee:proeco:v:161:y:2015:i:c:p:181-191
    DOI: 10.1016/j.ijpe.2014.12.026
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