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Capacity sharing with different oligopolistic competition and government regulation in a supply chain

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  • Junlong Chen
  • Xinran Xie
  • Jiali Liu

Abstract

This paper constructs a capacity sharing model in a supply chain to reveal the factors affecting equilibrium outcomes. The results show that improving the technical level lowers capacity charge and increases seller profits in any case. Product differentiation has uncertain impacts on equilibrium outcomes, which depend on government regulations and oligopolistic competition models. The improvement of supplier's fixed component of marginal costs improves capacity sharing charge and reduces profits and consumer surplus. The government regulations and oligopolistic competition model directly affect equilibrium outcomes and welfare distribution. Government capacity control helps improve social welfare, but the effect of government subsidies is uncertain.

Suggested Citation

  • Junlong Chen & Xinran Xie & Jiali Liu, 2020. "Capacity sharing with different oligopolistic competition and government regulation in a supply chain," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(1), pages 79-92, January.
    • Handle: RePEc:wly:mgtdec:v:41:y:2020:i:1:p:79-92
    DOI: 10.1002/mde.3094
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    Cited by:

    1. Chen, Xu & Peng, Ying & Wang, Xiaojun & Wang, Pengfei, 2024. "Capacity sharing between competing manufacturers: A collective good or a detrimental effect?," International Journal of Production Economics, Elsevier, vol. 268(C).
    2. Junlong Chen & Xinran Xie & Chaoqun Sun & Li Lin & Jiali Liu, 2022. "Optimal trade policy and welfare in a differentiated duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 3019-3043, October.
    3. Ji Sun & Qiang Gong & Leonard F. S. Wang, 2022. "Revenge consumption, government‐led voucher, and social welfare," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(6), pages 2570-2577, September.

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