On a Discounted Inventory Game

Part of the Annals of the International Society of Dynamic Games book series (AISDG, volume 11)


We investigate a problem where a company requires a comodity for its production. The demand is random. The company has one main supplier. It can also buy this commodity from the free market, but for a higher price. The supplier produces this commodity and delivers first to the company, but it has also an additional random demand. The problem is considered as a stochastic game with perfect information. We treat pairs of production strategies of a certain structure and show that there is such a pair which is a Nash equilibrium.


Nash Equilibrium Decision Rule Perfect Information Stochastic Game Optimality Equation 
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The author thanks the anonymous referees for many valuable hints and comments.


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© Springer Science+Business Media, LLC 2011

Authors and Affiliations

  1. 1.Department of MathematicsBrandenburg University of Technology CottbusCottbusGermany

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