Game theory model for optimum pricing in a two level supply chain

Abstract

In this research, we are looking to present a pricing model in the two-level supply chain using game theory, assuming there is advertising and in terms of uncertainty. In this research, it was tried to provide different models for different conditions in the supply chain, taking into account various supply chain competition strategies and conditions. The issue was designed with the goal of optimizing the pricing of two alternative products provided by two different manufacturers. The survey environment was considered highly competitive. The discussion of advertising in the chain and the uncertainty in the problem parameters were also considered in order to bring the model closer to real-world conditions. Then the model was solved for different strategies and optimal strategies for each side of the chain were identified. Finally, numerical issues were presented, solved and analyzed in different dimensions.