Fair Distribution of Efficiency Gains in Supply Networks from a Cooperative Game Theory Point of View

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Author(s): Stephan Zelewski (University of Duisburg-Essen, Germany)and Malte L. Peters (Center for Education and Science of the Federal Finance Administration, Germany)
Copyright: 2012
Pages: 23
Source title: Information Technologies, Methods, and Techniques of Supply Chain Management
Source Author(s)/Editor(s): John Wang (Montclair State University, USA)
DOI: 10.4018/978-1-4666-0918-1.ch009

Keywords: Business & Management / Business Information Systems / Business Science Reference / Supply Chain Management

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Abstract

In this paper, the authors address the distribution of efficiency gains among partially autonomous supply network actors in a manner they will accept as fair and as an incentive to cooperation. The problem is economically significant because it requires substantiating efficiency gains in an understandable manner. Moreover, supply networks suffer from a conflict potential because the partially autonomous actors seek to maximize their own shares of the efficiency gain. The method applied appropriates a model from cooperative game theory involving the t-value. The special nature of the t-value ensures that it seems rational to the actors to cooperate in the supply network. The proposed method for the distribution problem offers a fair distribution of efficiency gains in the supply network and ensures that the distribution results can be communicated easily.

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Fair Distribution of Efficiency Gains in Supply Networks from a Cooperative Game Theory Point of View

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