Equilibrium pricing and lead time decisions in a competitive industry
Journal
International Journal of Production Economics
Journal Volume
139
Journal Issue
2
Pages
586-595
Date Issued
2012
Author(s)
Abstract
Pricing and lead time are two crucial decisions to a success in today's competitive markets. This paper examines the equilibrium pricing and lead time decisions in a duopoly industry consisting of two large and several smaller firms with competition. We solve the sufficient Karush-Kuhn-Tucker (KKT) optimality conditions for the Nash equilibrium solution. We characterize the existence and uniqueness of the Nash equilibrium solution of pricing and lead time decisions for both homogenous and heterogeneous firms. Our case study provides important managerial insights about firms' behavior under price and lead time competition in a semiconductor manufacturing industry. © 2012 Elsevier B.V. All rights reserved.
SDGs
Type
journal article