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Implementation of optimal schedules in outsourcing with identical suppliers

Author

Listed:
  • Herbert Hamers

    (Tilburg University)

  • Flip Klijn

    (CSIC
    Barcelona GSE Center
    Tilburg University)

  • Marco Slikker

    (Eindhoven University of Technology)

Abstract

This paper deals with decentralized decision-making situations in which firms outsource production orders to multiple identical suppliers. Each firm aims to minimize the sum of its completion times. We study whether a central authority can install a mechanism such that strategic interaction leads to a socially optimal schedule. For the case of single demand the shortest-first mechanism implements optimal schedules in Nash equilibrium. We show that for the general case there exists no anonymous mechanism that implements optimal schedules in correlated equilibrium.

Suggested Citation

  • Herbert Hamers & Flip Klijn & Marco Slikker, 2019. "Implementation of optimal schedules in outsourcing with identical suppliers," Mathematical Methods of Operations Research, Springer;Gesellschaft für Operations Research (GOR);Nederlands Genootschap voor Besliskunde (NGB), vol. 89(2), pages 173-187, April.
    • Handle: RePEc:spr:mathme:v:89:y:2019:i:2:d:10.1007_s00186-018-0645-1
    DOI: 10.1007/s00186-018-0645-1
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    References listed on IDEAS

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    1. Chiu, Singa Wang & Chen, Hui-Cun & Wu, Hua-Yao & Chiu, Yuan-Shyi Peter, 2020. "A hybrid finite production rate system featuring random breakdown and rework," Operations Research Perspectives, Elsevier, vol. 7(C).

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    More about this item

    Keywords

    Game theory; Outsourcing; Scheduling; Efficiency; Implementation; Nash equilibrium; Correlated equilibrium; Price of stability;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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