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Applications of Multi-Criteria and Game Theory Approaches pp 365–403Cite as

Procurement Network Formation: A Cooperative Game Theoretic Approach

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Part of the book series: Springer Series in Advanced Manufacturing ((SSAM))

Abstract

In this chapter, we model the multiple unit single item procurement network formation problem as a surplus maximizing network flow cooperative game. Here, each edge is owned by a rational utility maximizing agent. Also, each agent has a capacity constraint on the number of units that he can process. That is, each edge can be assumed to have a capacity constraint on the flow that it can admit. The buyer has a demand for a certain number of units. The agents in the network must coordinate themselves to meet this demand. The buyer also has a specified valuation per unit of the item. The surplus which is the difference between the value generated and the minimum cost flow in the network, is to be divided among the agents that help provide the flow. We first investigate the conditions under which the core of this game is non-empty. We then construct an extensive-form game to implement the core whenever it is non-empty.

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Authors and Affiliations

  1. Department of Computer Science and Automation, Indian Institute of Science, Bangalore, 560012, India

    T. S. Chandrashekar & Y. Narahari

Authors
  1. T. S. Chandrashekar
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  2. Y. Narahari
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Corresponding author

Correspondence to Y. Narahari .

Editor information

Editors and Affiliations

  1. LSIS, Aix-Marseille University, Marseille, France

    Lyes Benyoucef

  2. LSIS, CNRS, Marseille, France

    Jean-Claude Hennet

  3. Department if Industrial Engineering and, Indian Institute of Technology, Kharagpur, West Bengal, India

    Manoj Kumar Tiwari

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Chandrashekar, T.S., Narahari, Y. (2014). Procurement Network Formation: A Cooperative Game Theoretic Approach. In: Benyoucef, L., Hennet, JC., Tiwari, M. (eds) Applications of Multi-Criteria and Game Theory Approaches. Springer Series in Advanced Manufacturing. Springer, London. https://doi.org/10.1007/978-1-4471-5295-8_16

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  • DOI: https://doi.org/10.1007/978-1-4471-5295-8_16

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  • Publisher Name: Springer, London

  • Print ISBN: 978-1-4471-5294-1

  • Online ISBN: 978-1-4471-5295-8

  • eBook Packages: EngineeringEngineering (R0)

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