Research On Strategy Optimization Of Upstream And Downstream Enterprises In Supply Chain Based On Game Theory

With the gradual perfection of market-oriented economy and the increase of global competition as the result of informatization, the market competition is not merely the competition between enterprises, but gradually becoming the competition among supply chains. Every single enterprise is limited in resource and strength. The business model of solitary activity will no longer thrive in the growingly complex market economy environment and enterprises are urgently looking for broader and deeper cooperation, thus, the partnership of supply chain is formed. And collaborative research and development (R&D) along with cooperative advertising are the important initiatives in coordinating the partnership of supply chain. Under such background, this dissertation sets the manufacturer as the central node enterprise and uses the game theory to analyze the decision-making of supplier-manufacturer under the subsidy mechanism of collaborative R&D as well as that of supplier-retailer under the mechanism of the cooperative advertising, therefore help enterprises optimize their profit and improve the overall profit of the supply chain.From the research point of view, this dissertation first looks at the supply chain composed by a manufacturer and a supplier, who cooperates in R&D in order to reduce costs. When building the collaborative R&D model, this dissertation considers whether the supply costs would be reduced if the manufacturer subsidizing the supplier’s R&D activities, and analyzes whether such mechanism of subsidizing on R&D is lucrative for both sides. Then it comes to the conclusion that when the demand is constant, the strategy of subsidizing R&D will not be accepted by both the supplier and the manufacturer at the same time, the gain of either party will be the lost of the other party, which is zero-sum game; when the demand is linear, it is possible that a non zero-sum outcome will be achieved by the strategy of subsidizing R&D and both parties will be profited.Then the dissertation discusses the cooperative advertising mechanism with three game theories under the second-order relation between manufacturer and retailer. These three game theories are, to start with, the typical Stackelberg equilibrium of leader and follower, in which the manufacturer leads and the retailer follows; the Nash equilibrium of synchronic actions, in which both parties act at the same time but don’t cooperate; lastly the advertising combination under Pareto equilibrium. Through the analysis of cooperative advertising, I find that manufacturers prefer to be the leader in order to maximize their profit, while retailers decide whether to be a follower or not according to the relative size of marginal returns of both parties. On the other hand, if both parties can reach to a common understanding, then they are well positioned to negotiate for optimizing the overall profit of supply chain and reach to the state of Pareto equilibrium.This dissertation takes manufacturer as a central node enterprise on supply chain, brings out the research on the mechanism of collaborative R&D as well as cooperative advertising based on multiple game theories, and contributes to the decision making of supply chain enterprises. It is concluded from the research above that when making a decision, all participants in the supply chain start with their own self-interests and pursue for maximum profit whether they cooperate or not. However, the outcome is not always the most optimized result.In order to realize the overall optimized Pareto state, all participants should make the marketing strategy based on the perspective of win-win, use close partnerships to seek enterprise connectivity in order to strengthen competitive advantages. Such outcome is not only rational and efficient, but it is the closest result to the operation of practical business environment. Thus, this dissertation has both theoretical value and practical significance.