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Global Supply Chain Security and Management by Darren Prokop

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Chapter 2

The Economics of Supply Chain Security

Abstract

This chapter introduces important tools of industrial organization and game theory in order to provide an economic rationale for supply chain security. Industrial organization will be used to differentiate among various types of business arrangements. These run the range of perfect competition through to monopoly, with various hybrids in between. Game theory will be outlined and used as a tool for making strategic decisions. It takes into account what others have done, will do, or might do. The purpose is to find an optimal strategy (if there is one to be found) given interdependent (and often adversarial) decision making.

Keywords

Commitment; Cooperation; Coordination; Game theory; Profit ...

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