The impact of a tariff on logistics service strategies in an international e-commerce trade: game theory and agent-based model

Abstract

ABSTRACTThis paper develops two models to investigate the impact of a tariff on logistics strategies in an international e-commerce trade, where the methods of game theory and agent-based model are utilized. We consider a foreign supplier and a domestic e-tailer. There are two logistics strategies: the supplier undertakes the logistics and the e-tailer shoulders the logistics. First, two strategies are compared under the game theory model. Then, we capture the uncertainties of market demand and tariff. An agent-based model is adopted to further study how the tariff affects the supply chain’s decisions and strategies. Some meaningful results are obtained. (i) The supplier should provide the logistics service when market demand and tariff are certain. (ii) Under demand uncertainty, the supplier and the e-tailer can reach an agreement on logistics strategies when the tariff is small. (iii) When tariff uncertainty is moderate, two players both abandon the logistics intention..