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dc.contributor.authorGüler, K.en_US
dc.contributor.authorKörpeoğlu, E.en_US
dc.contributor.authorŞen, Alperen_US
dc.date.accessioned2019-02-21T16:01:33Z
dc.date.available2019-02-21T16:01:33Z
dc.date.issued2018en_US
dc.identifier.issn0377-2217
dc.identifier.urihttp://hdl.handle.net/11693/49871
dc.description.abstractWe study the newsboy duopoly problem under asymmetric cost information. We extend the Lippman and McCardle (1997) of competitive newsboy to the case where the two firms are privately informed about their unit costs. The market demand is initially split between two firms and the excess demand for each firm is reallocated to the rival firm. We show the existence and uniqueness of a pure strategy equilibrium and characterize its structure. The equilibrium conditions have an interesting recursive structure that enables an easy computation of the equilibrium order quantities. Presence of strategic interactions creates incentives to increase order quantities for all firm types except the type that has the highest possible unit cost. Consequently, competition leads to higher total inventory in the industry. However, contrary to intuition, this is only true when the firms are non-identical. A firm's equilibrium order quantity increases with a stochastic increase in the total industry demand or with an increase in his initial allocation of the total industry demand. We demonstrate our model and results in an application in a dual-sourcing procurement setting using data that obtained from a large manufacturing company. Finally, we provide a full characterization of the equilibrium of the game for the special case of uniform demand and linear market shares.
dc.description.sponsorshipKemal Güler’s work on final revisions of the research reported in this paper was undertaken during his visit to Bilkent University supported by a fellowship grant from TUBITAK BIDEP 2236 Co-Circulation Fellowship Program Project Number 114C020. He acknowledges with gratitude the financial support of TUBITAK and hospitality of Bilkent University. Appendix A
dc.language.isoEnglish
dc.source.titleEuropean Journal of Operational Researchen_US
dc.relation.isversionofhttps://doi.org/10.1016/j.ejor.2018.05.035
dc.subjectAsymmetric informationen_US
dc.subjectCompetitive newsvendor problemen_US
dc.subjectGame theoryen_US
dc.subjectInventory competitionen_US
dc.titleNewsvendor competition under asymmetric cost informationen_US
dc.typeArticleen_US
dc.departmentDepartment of Industrial Engineeringen_US
dc.citation.spage561en_US
dc.citation.epage576en_US
dc.citation.volumeNumber271en_US
dc.citation.issueNumber2en_US
dc.relation.projectBilkent Üniversitesi - BIDEP 2236 - 114C020
dc.identifier.doi10.1016/j.ejor.2018.05.035
dc.publisherElsevier B.V.
dc.contributor.bilkentauthorŞen, Alperen_US
dc.embargo.release2020-12-01en_US


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