Capacity Sharing and Cost Allocation among Independent Firms with Congestion

We analyze the benefit of production/service capacity sharing for a set of independent firms. Firms have the choice of either operating their own production/service facilities or investing in a facility that is shared. Facilities are modeled as queueing systems with finite service rates. Firms decide on capacity levels (the service rate) to minimize delay costs and capacity investment costs possibly subject to service‐level constraints on delay. If firms decide to operate a shared facility they must also decide on a scheme for sharing the capacity cost. We formulate the problem as a cooperative game and identify settings under which capacity sharing is beneficial and there is a cost allocation that is in the core under either the first‐come, first‐served policy or an optimal priority policy. We show that capacity sharing may not be beneficial in settings where firms have heterogeneous work contents and service variabilities. In such cases, we specify conditions under which capacity sharing may still be beneficial for a subset of the firms.     

航运供应链上的品牌价值、公平关切与契约协调

航运供应链上的船公司提高企业品牌价值需要付出大量的投资成本,因此将会更加关注供应链上利润分配的公平。本文以单个船公司和单个货代公司构成的两级航运供应链为研究对象,运用博弈论分析船公司的公平关切行为和品牌投入意愿对航运供应链上各方利润的影响,探讨决策者非理性条件下航运供应链的合作模式和协调机制。研究表明:1)船公司的公平关切提高了其在供应链上利润分配占比,但降低了整个航运供应链的利润和效率;2)随着品牌投入意愿的提高,船公司的公平关切对航运供应链上各方决策的负作用就越明显;3)"收益共享成本共担"式契约能够消除公平关切的负作用,达到航运供应链纵向联盟的最优收益和整体效率。     

Should the Model for Risk‐Informed Regulation be Game Theory Rather than Decision Theory?

Risk analysts frequently view the regulation of risks as being largely a matter of decision theory. According to this view, risk analysis methods provide information on the likelihood and severity of various possible outcomes; this information should then be assessed using a decision‐theoretic approach (such as cost/benefit analysis) to determine whether the risks are acceptable, and whether additional regulation is warranted. However, this view ignores the fact that in many industries (particularly industries that are technologically sophisticated and employ specialized risk and safety experts), risk analyses may be done by regulated firms, not by the regulator. Moreover, those firms may have more knowledge about the levels of safety at their own facilities than the regulator does. This creates a situation in which the regulated firm has both the opportunity—and often also the motive—to provide inaccurate (in particular, favorably biased) risk information to the regulator, and hence the regulator has reason to doubt the accuracy of the risk information provided by regulated parties. Researchers have argued that decision theory is capable of dealing with many such strategic interactions as well as game theory can. This is especially true in two‐player, two‐stage games in which the follower has a unique best strategy in response to the leader's strategy, as appears to be the case in the situation analyzed in this article. However, even in such cases, we agree with Cox that game‐theoretic methods and concepts can still be useful. In particular, the tools of mechanism design, and especially the revelation principle, can simplify the analysis of such games because the revelation principle provides rigorous assurance that it is sufficient to analyze only games in which licensees truthfully report their risk levels, making the problem more manageable. Without that, it would generally be necessary to consider much more complicated forms of strategic behavior (including deception), to identify optimal regulatory strategies. Therefore, we believe that the types of regulatory interactions analyzed in this article are better modeled using game theory rather than decision theory. In particular, the goals of this article are to review the relevant literature in game theory and regulatory economics (to stimulate interest in this area among risk analysts), and to present illustrative results showing how the application of game theory can provide useful insights into the theory and practice of risk‐informed regulation.     

PITFALLS OF ROUNDING IN DISCRETE MANAGEMENT DECISION PROBLEMS

A number of articles on managerial decision making have addressed the issue of whether or not to round a fractional solution to obtain a solution for a problem involving discrete alternatives. (An example is the problem in which the decision maker must select exactly one of several investment alternatives, but attaches no meaning to selecting two-thirds of one alternative and one-third of another.) Those articles which suggest that rounding can lead to undesirable answers are seemingly supported by the numerous “textbook examples” that purport to illustrate the dangers of rounding. However, the standard examples in which rounding fails to give a workable solution involve only a few rounding possibilities (usually two or four) and do not come from real world applications. Hence, it is questionable whether they provide any insight about what is likely to occur in a practical setting. This note fills a gap in previous discussions of rounding by providing two easily understood examples that dramatically portray the difficulties that rounding can encounter. The first example belongs to an important class of practical problems. We illustrate that rounding fails not only for this example, but also fails for all problems in its class. The second example is a unique “showcase” problem which can be summarized by a 5 times 5 cost matrix. This problem contains more than a million rounding alternatives, all of them infeasible! Following these examples, we present a “rounding paradox” and we show that its resolution gives analytical support to the conclusion that rounding will produce grave difficulties in a wide variety of practical situations.     

Harsanyi power solution for games with restricted cooperation

This paper discusses the Harsanyi power solution for cooperative games in which cooperation among players is based on an arbitrary collection of feasible coalitions. We define the Harsanyi power solution as a value which distributes the Harsanyi dividends such that the dividend shares of players in each feasible coalition are proportional to the corresponding players’ participation index, (i.e., a power measure for players in the cooperation restrictions). When all coalitions can be formed in a game, the Harsanyi power solution coincides with the Shapley value. We provide two axiomatic characterizations for the Harsanyi power solution: one uses component efficiency and participation fairness, and the other uses efficiency and participation balanced contributions. Meanwhile, we show that the axioms of each axiomatization are logically independent. The study also shows that the Harsanyi power solution satisfies several other properties such as additivity and inessential player out. In addition, the Harsanyi power solution is the unique value that admits the \(\lambda \)-potential.     

Co‐opetition and Investment for Supply‐Chain Resilience

This paper considers the problem of disruption risk management in global supply chains. We consider a supply chain with two participants, who face interdependent losses resulting from supply chain disruptions such as terrorist strikes and natural hazards. The Harsanyi–Selten–Nash bargaining framework is used to model the supply chain participants' choice of risk mitigation investments. The bargaining approach allows a framing of both joint financing of mitigation activities before the fact and loss‐sharing net of insurance payouts after the fact. The disagreement outcome in the bargaining game is assumed to be the result of the corresponding non‐cooperative game. We describe an incentive‐compatible contract that leads to First Best investment and equal “gain” for all players, when the solution is “interior” (as it almost certainly is in practice). A supplier that has superior security practices (i.e., is inherently safer) exploits its informational advantage by extracting an “information rent” in the usual spirit of incomplete information games. We also identify a special case of this contract, which is robust to moral hazard. The role of auditing in reinforcing investment incentives is also examined.     

盟员行为偏好下生鲜农产品供应链生鲜努力激励机制与协调研究

本文建立了"合作社+核心企业"模式下两阶段折扣定价的二级生鲜农产品供应链，基于消费者生鲜偏好、价格敏感度对市场需求的影响，选取Nash谈判解作为公平参考点，引入合作社公平偏好理论，研究供应链盟员保鲜投入决策。针对合作社保鲜努力激励，探讨供应链盟员偏好对保鲜努力水平以及收益共享契约激励协调效果的影响。研究发现，消费者生鲜偏好的提高能够促进收益共享契约的激励效果，并且提高合作社公平效用。同时，收益共享契约在第一阶段对保鲜努力水平的激励效果优于第二阶段，而在第二阶段联合使用收益共享和成本分摊能够显著提高该阶段的保鲜投入。     

Supply Networks as a Complex Adaptive System: Toward Simulation‐Based Theory Building on Evolutionary Decision Making

In this article, we examine how the firms embedded in supply networks engage in decision making over time. The supply networks as a complex adaptive system are simulated using cellular automata (CA) through a dynamic evolution of cooperation (i.e., “voice” decision) and defection (i.e., “exit” decision) among supply network agents (i.e., firms). Simple local rules of interaction among firms generate complex patterns of cooperation and defection decisions in the supply network. The incentive schemes underlying decision making are derived through different configurations of the payoff‐matrix based on the game theory argument. The prisoner's dilemma game allows capturing the localized decision‐making process by rational agents, and the CA model allows the self‐organizing outcome to emerge. By observing the evolution of decision making by cooperating and defecting agents, we offer testable propositions regarding relationship development and distributed nature of governance mechanisms for managing supply networks.     

Misplaced Inventory and Radio‐Frequency Identification (RFID) Technology: Information and Coordination

Misplaced inventory is a major operational problem in many supply chains. Radio‐frequency identification (RFID) technology has been publicized as a promising solution for the misplaced inventory. Adoption of this technology has a fixed cost and variable cost of implementation, which can cause incentive issues in the supply chain. In this paper, we consider a supply chain under misplacement of inventory subject to uncertain demand. We study both centralized and decentralized cases and identify the conditions to coordinate the supply chain under implementation of RFID. We show that the incentives of the parties for investing in the technology are not perfectly aligned in the existence of the fixed cost of investment. Based on the relative payments of the parties for the fixed cost of investment, the incentives to adopt RFID can be characterized into regions, where we observe only one party or two parties benefiting from the technology when the tag price falls in a region specified in the paper. We further establish the effects of changes in mean and variance of a uniform demand on the incentives for investing in RFID and find that the incentives of the firms may indeed decrease as demand becomes more variable.     

Locating Facilities in the Presence of Disruptions and Incomplete Information*

In this article, we analyze a location model where facilities may be subject to disruptions. Customers do not have advance information about whether a given facility is operational or not, and thus may have to visit several facilities before finding an operational one. The objective is to locate a set of facilities to minimize the total expected cost of customer travel. We decompose the total cost into travel, reliability, and information components. This decomposition allows us to put a value on the advance information about the states of facilities and compare it to the reliability and travel cost components, which allows a decision maker to evaluate which part of the system would benefit the most from improvements. The structure of optimal solutions is analyzed, with two interesting effects identified: facility centralization and co‐location; both effects appear to be stronger than in the complete information case, where the status of each facility is known in advance.     

Wage Determination in Post-War Italy

ABSTRACT: A bargaining model is proposed and tested in order to explain the irrelevance of the general labour market conditions to wage settlements in the post-war Italian economy. The model is a “right to manage model”, but the solution cannot be improved, being both on the labour demand curve and on the contract curve. The reason for such an outcome is that both firms and unions have priorities, and distinguish the labour force between insiders and outsiders. Different definitions of insiders are used, but in the postwar Italian economy the employees and ex-employees of the industrial sector appear to be the share of the labour force which have been better protected by both contractual parties.     

Managing value appropriation in buyer–supplier relationships: The role of commercial decision resources

The resource-based view explains firms’ value appropriation in buyer–supplier relationships by pointing to sustained differences in economic efficiency across firms. Firms with more efficient resources create more value than competitors, which in turn provides a “protective cushion” against competition. However, just as firms may differ in the economic efficiency of their resources and in the value they create, they may also differ in their information processing and how successful they are at value appropriation. Building on the literature on decision-making under uncertainty in psychology, I argue that firms may increase their value appropriation in exchange relationships by investing in commercial decision resources that allow for more effective information processing in commercial decisions. Examples of commercial decision resources include IT-based systems for product costing and tracking customers/competitors, the design of commercial organization, control systems, and commercial experience and skill.     

Coalitions of Actors and Managerial Innovations in the Healthcare and Social Healthcare Sector

This paper studies the behavior of a variety of stakeholders around the adoption of managerial innovations desired by operational managers of health services institutions. We show that if the operational manager may cause the managerial innovation, the tool prospective is subject to power games around coalitions of actors. The study of several management situations in health services institutions enables us, using the game theory, to highlight the “winning”, “losing” and “uncertain” coalitions that can achieve operational management within the establishment to settle a managerial innovation.     

Production,Process Investment,and the Survival of Debt‐Financed Startup Firms

Whether to invest in process development that can reduce the unit cost and thereby raise future profits or to conserve cash and reduce the likelihood of bankruptcy is a key trade‐off faced by many startup firms that have taken on debt. We explore this trade‐off by examining the production quantity and cost reducing R&D investment decisions in a two period model wherein a startup firm must make a minimum level of profit at the end of the first period to survive and operate in the second period. We specify a probabilistic survival measure as a function of production and investment decisions to track and manage the risk exposure of the startup depending on three key market factors: technology, demand, and competitor's cost. We develop managerial insights by characterizing how to create operational hedges against the bankruptcy risk: if a startup makes a “conservative” investment decision, then it also selects an optimal quantity that is less than the monopoly level and hence sacrifices some of first period expected profits to increase its survival chances. If it decides to invest “aggressively,” then it produces more than the monopoly level to cover the higher bankruptcy risk. We also illustrate that debt constraint shrinks the decision space, wherein such process investments are viable.     

Reducing Packaging Waste and Cost via Consumer Price Discounts

Low‐waste packaging may imply an inconvenience to consumers and cause firms to offer a compensating price discount. For example, Starbucks’ “Take the Mug Pledge” campaign provides a 10‐cent discount for customers who purchase coffee without a standard cup (i.e., customers provide their own cup). Understanding how such a discount drives demand and profit is the focus of this article. We consider a monopolist that can offer a reduced‐packaging option for its product at a variable cost savings. That option implies a transactional “inconvenience” cost for consumers. While that transactional cost is generally positive, our model also permits some consumers to associate convenience with reduced packaging. We derive the optimal price and discount that maximize profits. We show the optimal discount is bounded by the magnitude of the variable cost savings associated with the packaging reduction. We explore when the optimal discount is negative (a price premium), which requires a specific proportion of consumers to associate convenience with reduced packaging. We also derive conditions under which the firm should price to eliminate demand for the standard product, rather than segment the market, to leverage the variable cost savings of reduced packaging. When the variable cost savings are low (e.g., as is true for Starbucks), we show the profit curve for the segmenting policy is relatively flat for a discount up to several multiples of the cost differential. Finally, we demonstrate the potential for the reduced packaging option, with optimal discounting, to simultaneously increase profit and consumer surplus while reducing waste.     

高层管理团队内部社会资本、团队冲突和决策效果的关系——研究综述与理论分析框架

反映在结构因素、关系因素和认知因素三个维度上的高管团队内部社会资本为决策信息的交换和共享提供了机会、意愿和能力,有利于团队内部形成建设性的冲突模式,促进决策效果的提高.本文以团队冲突为中介变量,建立了高管团队内部社会资本与决策效果的关系的理论框架,提出了研究命题,并对企业高管团队内部社会资本的培育提出建议.     

Employment Policy Implications of New Management Systems

ABSTRACT: Technical change, economic internationalisation and generally increased competition have caused management in many firms to adopt new employee management systems such as “lean production”, TQM, and have placed a premium on “high performance” cooperative industrial relations systems. This article seeks to provide a first analysis of their likely effects upon the structure of employment, and whether they exacerbate the unemployment problems of many categories of workers. It is argued that these systems place a premium on employment stability of those workers for whom functional flexibility and high levels of cooperation are needed. It asks whether a mix of job stability and limited functional flexibility among incubent workers in many Western European countries has contributed to low hiring rates, and how far cooperative relations within the firm can be cultivated in isolation from conditions in other firms.     

For a New Incomes Policy: New Possibilities and Objectives

Abstract. Moving off from the lessons of the Italian incomes policy experience of the 1980s, this paper presents a new framework to interpret the performance of incomes policy (LP) agreements and institutions, and propose new strategies for the 1990s. IP is viewed as a cooperative outcome that evolves from a non-cooperative long-term game between several players (workers, unions, firms, government, parliament, etc.), along the lines of the model drawn up by Brunetta and Carraro (1988). The paper is divided into three sections. The first summarizes the history of IP in Italy, starting from the phase of the predetermination of disinflation (1983-84). We firstly outline some of the fundamental features of recent Italian development (the “Italian model”), noting how new IP measures could be taken to create an adequate response to the new European and international deadlines. The difficulties and uncertainties that presently exist at both national and international level make the introduction of IP in new, cooperative and evolutive terms, necessary. The second section examines the various topics and new objectives of a “strategic” IP resumption, particularly relevant to the concerted action on the cost of labour, presently being discussed. The topics we consider are: the link between wage reform and IP; the recent concerted agreements reached on fiscal drag (26.1.89) and on the cost of labour (25.1 and 6.7.90); the importance of the role of productivity gain-sharing; programmed inflation and price control; indexation of gross wages and safeguarding the net wage; increase of the tax base; profit-sharing. The third and final section presents a few observations which further investigate the distribution of productivity gains between sectors and uses: how it is articulated amongst the various bargaining levels (central, sectoral or enterprise). Redistribution amongst sectors is dealt with in terms of “protected” and “unprotected” areas of the economy, showing the need of a concerted regulation at the central level. Sharing between factors and allocations presents a very different case, and is dealt with at sectoral and firm level.     

Path cooperative games

Cooperative games provide an appropriate framework for fair and stable profit distribution in multiagent systems. In this paper, we study the algorithmic issues on path cooperative games that arise from the situations where some commodity flows through a network. In these games, a coalition of edges or vertices is successful if they establish a path from the source to the sink in the network, and lose otherwise. Based on dual theory of linear programming and the relationship with flow games, we provide the characterizations on the core, CS-core, least-core and nucleolus of path cooperative games, which implies all of these solution concepts are polynomial-time solvable for path cooperative games.     

Appendix. Incomes Policies in Europe during the Eighties

Abstract. Moving off from the lessons of the Italian incomes policy experience of the 1980s, this paper presents a new framework to interpret the performance of incomes policy (LP) agreements and institutions, and propose new strategies for the 1990s. IP is viewed as a cooperative outcome that evolves from a non-cooperative long-term game between several players (workers, unions, firms, government, parliament, etc.), along the lines of the model drawn up by Brunetta and Carraro (1988). The paper is divided into three sections. The first summarizes the history of IP in Italy, starting from the phase of the predetermination of disinflation (1983-84). We firstly outline some of the fundamental features of recent Italian development (the “Italian model”), noting how new IP measures could be taken to create an adequate response to the new European and international deadlines. The difficulties and uncertainties that presently exist at both national and international level make the introduction of IP in new, cooperative and evolutive terms, necessary. The second section examines the various topics and new objectives of a “strategic” IP resumption, particularly relevant to the concerted action on the cost of labour, presently being discussed. The topics we consider are: the link between wage reform and IP; the recent concerted agreements reached on fiscal drag (26.1.89) and on the cost of labour (25.1 and 6.7.90); the importance of the role of productivity gain-sharing; programmed inflation and price control; indexation of gross wages and safeguarding the net wage; increase of the tax base; profit-sharing. The third and final section presents a few observations which further investigate the distribution of productivity gains between sectors and uses: how it is articulated amongst the various bargaining levels (central, sectoral or enterprise). Redistribution amongst sectors is dealt with in terms of “protected” and “unprotected” areas of the economy, showing the need of a concerted regulation at the central level. Sharing between factors and allocations presents a very different case, and is dealt with at sectoral and firm level.