Speaker(s):  Pranab Majumder (Duke)

Title:            "Asset-Specific Supply Tree Competition and Leadership"

Author(s): Pranab Majumder & Ashok Srinivasan

Abstract
This paper considers asset-specific supply chains which are prevalent in many industries, notably the Japanese keiretsu, with price dependent deterministic demand. We study the effect of contract leadership and coordination. We demonstrate the importance of leader position in the chain-- this determines the extent of demand marginalization and cost curve marginalization. We also show how to determine the optimal location of the leader. Member profits are determined by system-wide rather than individual costs. We consider Cournot competition between competing supply chains and show the effect of changes in leadership and cost efficiency on the equilibrium. Our work formalizes many intuitive insights and serves as a foundation for a number of extensions.

Keywords
Stackelberg Game, Double Marginalization, Contracting, Non-Cooperative Games, Supply Chains, Coordination, Cournot Competition, Japanese keiretsu