IDEAS home Printed from https://ideas.repec.org/a/eee/forpol/v75y2017icp23-33.html
   My bibliography  Save this article

Forest-based industrial network: Case of the French timber market

Author

Listed:
  • Dragicevic, Arnaud Z.
  • Barkaoui, Ahmed

Abstract

Following the literature on automation, we model the industrial network of the forest-based sector, with random demands, in the presence of supply contracts. The economic network is composed of upstream, instream and downstream agents. Through the resolution of the variational inequality model, we investigate the network equilibrium flows and compute the prices at which the former can be attained. With respect to other results on optimal pricing of timber and wood products in France, the model outputs show that forest resources are overvalued, while manufactured products are undervalued. At last, we explicitly state the equilibrium conditions in case of vertical integration between the upstream and instream agents.

Suggested Citation

  • Dragicevic, Arnaud Z. & Barkaoui, Ahmed, 2017. "Forest-based industrial network: Case of the French timber market," Forest Policy and Economics, Elsevier, vol. 75(C), pages 23-33.
    • Handle: RePEc:eee:forpol:v:75:y:2017:i:c:p:23-33
    DOI: 10.1016/j.forpol.2016.11.013
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1389934116304324
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.forpol.2016.11.013?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Terry L. Friesz, 2010. "Dynamic Optimization and Differential Games," International Series in Operations Research and Management Science, Springer, number 978-0-387-72778-3, December.
    2. Oliver E. Williamson, 2005. "The Economics of Governance," American Economic Review, American Economic Association, vol. 95(2), pages 1-18, May.
    3. Daron Acemoglu & Simon Johnson & Todd Mitton, 2005. "Determinants of Vertical Integration: Finance, Contracts, and Regulation," NBER Working Papers 11424, National Bureau of Economic Research, Inc.
    4. Ahmed Barkaoui & Arnaud Z. Dragicevic, 2016. "Nash bargaining and renegotiation with social preferences: case of the roundwood log supply contracts in the French timber market," Post-Print hal-01352691, HAL.
    5. Nagurney, Anna & Dong, June & Zhang, Ding, 2002. "A supply chain network equilibrium model," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 38(5), pages 281-303, September.
    6. Ahmed Barkaoui & Arnaud Dragicevic, 2014. "Nash bargaining and renegotiation with social preferences: case of the roundwood log supply contracts," Working Papers - Cahiers du LEF 2014-08, Laboratoire d'Economie Forestiere, AgroParisTech-INRA, revised Jul 2014.
    7. Nagurney, Anna, 2009. "A system-optimization perspective for supply chain network integration: The horizontal merger case," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 45(1), pages 1-15, January.
    8. Barkaoui, Ahmed & Dragicevic, Arnaud Z., 2016. "Nash bargaining and renegotiation with social preferences: case of the roundwood log supply contracts in the French timber market," Forest Policy and Economics, Elsevier, vol. 69(C), pages 90-100.
    9. Joseph J. Spengler, 1950. "Vertical Integration and Antitrust Policy," Journal of Political Economy, University of Chicago Press, vol. 58(4), pages 347-347.
    10. Dong, June & Zhang, Ding & Nagurney, Anna, 2004. "A supply chain network equilibrium model with random demands," European Journal of Operational Research, Elsevier, vol. 156(1), pages 194-212, July.
    11. Anna Nagurney & Dong Li & Sara Saberi & Tilman Wolf, 2014. "A Dynamic Network Economic Model of a Service-Oriented Internet with Price and Quality Competition," Springer Optimization and Its Applications, in: Valery A. Kalyagin & Panos M. Pardalos & Themistocles M. Rassias (ed.), Network Models in Economics and Finance, edition 127, pages 239-264, Springer.
    12. Friesz, Terry L. & Rigdon, Matthew A. & Mookherjee, Reetabrata, 2006. "Differential variational inequalities and shipper dynamic oligopolistic network competition," Transportation Research Part B: Methodological, Elsevier, vol. 40(6), pages 480-503, July.
    13. Gérard P. Cachon & Martin A. Lariviere, 2005. "Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations," Management Science, INFORMS, vol. 51(1), pages 30-44, January.
    14. M. G. Cojocaru & P. Daniele & A. Nagurney, 2005. "Projected Dynamical Systems and Evolutionary Variational Inequalities via Hilbert Spaces with Applications1," Journal of Optimization Theory and Applications, Springer, vol. 127(3), pages 549-563, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhaobo Chen & Chunying Tian & Ding Zhang & Dongyan Chen, 2020. "Dynamic model of a supply chain network with sticky price," Operational Research, Springer, vol. 20(2), pages 649-670, June.
    2. Arnaud Zlatko Dragicevic, 2022. "Exchange Networks with Stochastic Matching," Games, MDPI, vol. 14(1), pages 1-18, December.
    3. Moon, Ilkyeong & Feng, Xuehao, 2017. "Supply chain coordination with a single supplier and multiple retailers considering customer arrival times and route selection," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 106(C), pages 78-97.
    4. Nagurney, Anna & Saberi, Sara & Shukla, Shivani & Floden, Jonas, 2015. "Supply chain network competition in price and quality with multiple manufacturers and freight service providers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 77(C), pages 248-267.
    5. Gaudin, Germain, 2016. "Pass-through, vertical contracts, and bargains," Economics Letters, Elsevier, vol. 139(C), pages 1-4.
    6. Chen, Xu & Li, Shanshan & Wang, Xiaojun, 2020. "Evaluating the effects of quality regulations on the pharmaceutical supply chain," International Journal of Production Economics, Elsevier, vol. 230(C).
    7. Chen, Kebing & Xiao, Tiaojun, 2009. "Demand disruption and coordination of the supply chain with a dominant retailer," European Journal of Operational Research, Elsevier, vol. 197(1), pages 225-234, August.
    8. Michael Krapp & Johannes B. Kraus, 2019. "Coordination contracts for reverse supply chains: a state-of-the-art review," Journal of Business Economics, Springer, vol. 89(7), pages 747-792, September.
    9. Elahi, Ehsan & Lamba, Narasimha & Ramaswamy, Chinthana, 2013. "How can we improve the performance of supply chain contracts? An experimental study," International Journal of Production Economics, Elsevier, vol. 142(1), pages 146-157.
    10. Feng, Xuehao & Moon, Ilkyeong & Ryu, Kwangyeol, 2014. "Revenue-sharing contracts in an N-stage supply chain with reliability considerations," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 20-29.
    11. Yan, Wei & Xiong, Yu & Chu, Junhong & Li, Gendao & Xiong, Zhongkai, 2018. "Clicks versus Bricks: The role of durability in marketing channel strategy of durable goods manufacturers," European Journal of Operational Research, Elsevier, vol. 265(3), pages 909-918.
    12. Xiangfeng Chen & Anyu Wang, 2012. "Trade credit contract with limited liability in the supply chain with budget constraints," Annals of Operations Research, Springer, vol. 196(1), pages 153-165, July.
    13. Kirshner, Samuel N. & Shao, Lusheng, 2018. "Internal and external reference effects in a two-tier supply chain," European Journal of Operational Research, Elsevier, vol. 267(3), pages 944-957.
    14. Daniel Granot & Shuya Yin, 2005. "On the effectiveness of returns policies in the price‐dependent newsvendor model," Naval Research Logistics (NRL), John Wiley & Sons, vol. 52(8), pages 765-779, December.
    15. Pfeiffer, Thomas, 2016. "A comparison of simple two-part supply chain contracts," International Journal of Production Economics, Elsevier, vol. 180(C), pages 114-124.
    16. Senlin Zhao & Qinghua Zhu, 2017. "Remanufacturing supply chain coordination under the stochastic remanufacturability rate and the random demand," Annals of Operations Research, Springer, vol. 257(1), pages 661-695, October.
    17. Ding, Ding & Chen, Jian, 2008. "Coordinating a three level supply chain with flexible return policies," Omega, Elsevier, vol. 36(5), pages 865-876, October.
    18. Chan, Chi Kin & Zhou, Yan & Wong, Kar Hung, 2019. "An equilibrium model of the supply chain network under multi-attribute behaviors analysis," European Journal of Operational Research, Elsevier, vol. 275(2), pages 514-535.
    19. Daniel Granot & Shuya Yin, 2008. "Competition and Cooperation in Decentralized Push and Pull Assembly Systems," Management Science, INFORMS, vol. 54(4), pages 733-747, April.
    20. Wu, Xiaole & Kouvelis, Panos & Matsuo, Hirofumi & Sano, Hiroki, 2014. "Horizontal coordinating contracts in the semiconductor industry," European Journal of Operational Research, Elsevier, vol. 237(3), pages 887-897.

    More about this item

    Keywords

    Operational research; Network economics; Variational inequality; Supply chain; Forest-based sector;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L73 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Forest Products

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:forpol:v:75:y:2017:i:c:p:23-33. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/forpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.