Studies on Horizontal Competition among Homogenous Retailers Based on Agent-based Approach

Authors

Ming Xie, Research Center for Contemporary Management, Tsinghua University School of Economics and Management, Tsinghua University Beijing 100084, ChinaFollow
J. Chen, Research Center for Contemporary Management, Tsinghua University School of Economics and Management, Tsinghua University Beijing 100084, ChinaFollow

Document Type

Article

Abstract

This paper adopts agent-based simulation to study the horizontal competition among homogenous price-setting retailers in a one-to-many supply chain (one supplier and multiple retailers). We model the supplier and retailers as agents, and design their behavioral rules respectively. The results show that although the agents learn individually based on their own experiences, the system shows an asymptotic convergence, which approaches Nash equilibrium. Based on these results, we discuss the effects of the retailers’ horizontal competition on the retail price, retailers’ and supplier’s profits.

Recommended Citation

Xie, Ming and Chen, J., "Studies on Horizontal Competition among Homogenous Retailers Based on Agent-based Approach" (2004). ICEB 2004 Proceedings (Beijing, China). 61.
https://aisel.aisnet.org/iceb2004/61