Pricing and Allotment in a Sea-Cargo Supply Chain with Reference Effect: A Dynamic Game Approach
The contract between the carrier and forwarder is a long-term issue, and the repeated contract business makes the forwarder develop a reference point based on the contract prices, and this reference effect, to a large extent, affects the forwarder’s contract purchasing decisions. Based on that, this...
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| Format: | Article |
| Language: | English |
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Wiley
2013-01-01
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| Series: | Discrete Dynamics in Nature and Society |
| Online Access: | http://dx.doi.org/10.1155/2013/162563 |
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| _version_ | 1832548685521616896 |
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| author | Lei Xu Govindan Kannan Xiaoli Yang Jian Li Xiukun Zhao |
| author_facet | Lei Xu Govindan Kannan Xiaoli Yang Jian Li Xiukun Zhao |
| author_sort | Lei Xu |
| collection | DOAJ |
| description | The contract between the carrier and forwarder is a long-term issue, and the repeated contract business makes the forwarder develop a reference point based on the contract prices, and this reference effect, to a large extent, affects the forwarder’s contract purchasing decisions. Based on that, this paper introduces the reference effect in the sea-cargo supply chain and studies a multiple-period contract problem between the carrier and the forwarder. It is found that when the capacity price in the spot market is less than the forwarder’s willingness-to-pay, the forwarder’s contract purchasing decision is not affected by the reference effect, only by the capacity price in the spot market, and the multiple-period contract problem can be simplified into a single-period game. In addition, the carrier’s optimal contract wholesale price approaches the capacity price in the spot market. Although, the forwarder’s contract purchasing decision depends upon the reference effect, it is difficult to derive the closed-form solution. Moreover, because of the risk in the spot market, the carrier tends to sell his/her capacity in the contract market. Finally, we employ the numerical simulation to study the carrier’s contract pricing decisions and the forwarder’s capacity purchasing decisions in two cases. |
| format | Article |
| id | doaj-art-87e1f558269d4b9b8f6e54a7e7c18dc8 |
| institution | Kabale University |
| issn | 1026-0226 1607-887X |
| language | English |
| publishDate | 2013-01-01 |
| publisher | Wiley |
| record_format | Article |
| series | Discrete Dynamics in Nature and Society |
| spelling | doaj-art-87e1f558269d4b9b8f6e54a7e7c18dc82025-02-03T06:13:17ZengWileyDiscrete Dynamics in Nature and Society1026-02261607-887X2013-01-01201310.1155/2013/162563162563Pricing and Allotment in a Sea-Cargo Supply Chain with Reference Effect: A Dynamic Game ApproachLei Xu0Govindan Kannan1Xiaoli Yang2Jian Li3Xiukun Zhao4School of Management, Tianjin University of Technology, 391 Binshui Xidao, Xiqing District, Tianjin 300384, ChinaDepartment of Business and Economics, University of Southern, 5230 Odense, DenmarkSchool of Management, Tianjin University of Technology, 391 Binshui Xidao, Xiqing District, Tianjin 300384, ChinaSchool of Management, Tianjin University of Technology, 391 Binshui Xidao, Xiqing District, Tianjin 300384, ChinaSchool of Business, Nankai University, Tianjin 300071, ChinaThe contract between the carrier and forwarder is a long-term issue, and the repeated contract business makes the forwarder develop a reference point based on the contract prices, and this reference effect, to a large extent, affects the forwarder’s contract purchasing decisions. Based on that, this paper introduces the reference effect in the sea-cargo supply chain and studies a multiple-period contract problem between the carrier and the forwarder. It is found that when the capacity price in the spot market is less than the forwarder’s willingness-to-pay, the forwarder’s contract purchasing decision is not affected by the reference effect, only by the capacity price in the spot market, and the multiple-period contract problem can be simplified into a single-period game. In addition, the carrier’s optimal contract wholesale price approaches the capacity price in the spot market. Although, the forwarder’s contract purchasing decision depends upon the reference effect, it is difficult to derive the closed-form solution. Moreover, because of the risk in the spot market, the carrier tends to sell his/her capacity in the contract market. Finally, we employ the numerical simulation to study the carrier’s contract pricing decisions and the forwarder’s capacity purchasing decisions in two cases.http://dx.doi.org/10.1155/2013/162563 |
| spellingShingle | Lei Xu Govindan Kannan Xiaoli Yang Jian Li Xiukun Zhao Pricing and Allotment in a Sea-Cargo Supply Chain with Reference Effect: A Dynamic Game Approach Discrete Dynamics in Nature and Society |
| title | Pricing and Allotment in a Sea-Cargo Supply Chain with Reference Effect: A Dynamic Game Approach |
| title_full | Pricing and Allotment in a Sea-Cargo Supply Chain with Reference Effect: A Dynamic Game Approach |
| title_fullStr | Pricing and Allotment in a Sea-Cargo Supply Chain with Reference Effect: A Dynamic Game Approach |
| title_full_unstemmed | Pricing and Allotment in a Sea-Cargo Supply Chain with Reference Effect: A Dynamic Game Approach |
| title_short | Pricing and Allotment in a Sea-Cargo Supply Chain with Reference Effect: A Dynamic Game Approach |
| title_sort | pricing and allotment in a sea cargo supply chain with reference effect a dynamic game approach |
| url | http://dx.doi.org/10.1155/2013/162563 |
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