Coopetitive Game Research Articles

A REFERENCE ARCHITECTURE OF HUMAN CYBER-PHYSICAL SYSTEMS – PART III: SEMANTIC FOUNDATIONS

The design and analysis of multi-agent human cyber-physical systems in safety-critical or industry-critical domains calls for an adequate semantic foundation capable of exhaustively and rigorously describing all emergent effects in the joint dynamic behavior of the agents that are relevant to their safety and well-behavior. We present such a semantic foundation. This framework extends beyond previous approaches by extending the agent-local dynamic state beyond state components under direct control of the agent and belief about other agents (as previously suggested for understanding cooperative as well as rational behavior) to agent-local evidence and belief about the overall cooperative, competitive, or coopetitive game structure. We argue that this extension is necessary for rigorously analyzing systems of human cyber-physical systems because humans are known to employ cognitive replacement models of system dynamics that are both non-stationary and potentially incongruent. These replacement models induce visible and potentially harmful effects on their joint emergent behavior and the interaction with cyber-physical system components.

Service innovation decision for manufacturing enterprises based on a coopetition perspective

Based on product technology, service innovation can enable manufacturing enterprises to achieve value-added and competitiveness improvement. But the resources and capabilities of individual enterprises hinder service innovation, more and more enterprises choose to cooperate with competitors for service innovation. Therefore, this paper studies the strategic issues of service innovation in manufacturing enterprises based on the theory of coopetition. First, we construct a competition game model between two manufacturing service integrators (MSIs) regarding service prices, service levels, and service innovation investment. Then, a coopetition game model is established and compared for analysis. We have found that cooperation between MSI and competitor for service innovation can provide higher-quality services and create higher market demand. However, cooperation is not always beneficial for service innovation, as there exists a favorable environment for cooperation within which MSIs can achieve higher profits with lower service prices and investment in service innovation. In addition, the spillover effect in competition strategy is positively related to the service innovation performance of MSIs, but it has little impact under the coopetition strategy. These findings provide guidance and reference for the development of service innovation and service-oriented transformation in manufacturing enterprises.

Dynamic coopetition game between private label and national brand under carbon trading policy

The increasing environmental concerns have changed the coopetition behavior between private-label (PL) retailers and national-brand (NB) manufacturers, which needs firms to reconsider their competitive and cooperative strategies to cope with this change. To address this need, we incorporate carbon trading policy into dynamic coopetition game models between a PL retailer and an NB manufacturer. We examine their dynamic evolution trajectories of state variables, decision variables, and profit value functions by using numerical simulation. The sensitivity analysis shows that: (i) some key parameters affect the steady-state values of variables and profit value functions; (ii) the relative strengths of the NB manufacturer and the PL retailer affect decision variables and profit value functions. The results indicate that the carbon trading policy significantly affects dynamic coopetition between the PL retailer and the NB manufacturer.

The effects and conflicts of co-opetition in a rail-water multimodal transport system.

This study investigates a rail-water multimodal transport system composed of a railway company, a liner company, and an emerging multi-modal operator. Based on the co-opetition game, we discuss decision strategy preference and conflict from a multi-stakeholder perspective to optimize individual profit and system efficiency. It is found that although the invasion of multi-modal operators into the market poses a threat to competition, their service effort directly affects the market demand and promotes the profits of each carrier. The free-riding and market expansion effects triggered by service effort interact with each other. However, multi-modal operators can cope with the negative impact of the free-riding effect through the service strategy and promote system efficiency optimization. Specifically, discussing each carrier's decision-making preferences for maximizing profits, we find that the multi-modal operators' strategy can achieve the Pareto optimal of triple-win, and the system efficiency is also optimal simultaneously.

Plastic-Pollution Reduction and Bio-Resources Preservation Using Green-Packaging Game Coopetition

In this paper, we deal with the renowned problem of plastic pollution caused by food consumption and its conservation. Specifically, we consider the producer/reseller decision problem of industrial organizations in conditions of perfect competition within small oligopoly clusters. Indeed, very often, one major sustainability problem is that the presence of direct competitors in the same market determines entrepreneurship choices which lower production costs and packaging costs at the expense of the environment and public health. For this purpose, in order to show economic scenarios in which the respect and preservation of the environment and natural resources are quantitatively compatible with profits and economic growth, we present a provisional coopetitive model of the strategic interaction of two food enterprises, in direct duopoly competition, through investments in sustainable-packaging technologies. The macroeconomic goal is to propose possible actions to reduce carbon footprints and the inflow of plastics to the marine environment, following the environmental targets established by the United Nations, also in the presence of direct perfect oligopolistic competition in the same market. From a microeconomic point of view, we assume the existence of two competitors selling a very similar type of food in the same market; therefore, within a competitive interaction, we adopt a classic “Cournot duopoly” core upon which we define a parametric game, namely, a coopetitive game, together with its possible dynamical scenarios and solutions. We should notice that beyond the parameter arising from the cooperation construct, we introduce a matrix of stochastic variables, which we can also consider as the state of the world. Moreover, we numerically examine one possible state of the world to exemplify our model proposal. We determine, analytically and graphically, the optimal investment in the cooperative strategy, the purely coopetitive solution and some super-cooperative solutions. The cooperative strategy represents the common investment chosen to acquire advanced green technologies for innovative packaging, while the fourth component of any solution in the strategy space represents the state of the world at the end of the coopetitive process in which, finally, we can see the profits and costs deriving from the adoption of the green technologies.

Efficient and stable data-sharing in a public transit oligopoly as a coopetitive game

In this study, various forms of data sharing are axiomatized. A new way of studying coopetition, especially data-sharing coopetition, is proposed. The problem of the Bayesian game with signal dependence on actions is observed; and a method to handle such dependence is proposed. We focus on fixed-route transit service markets. A discrete model is first presented to analyze the data-sharing coopetition of an oligopolistic transit market when an externality effect exists. Given a fixed data sharing structure, a Bayesian game is used to capture the competition under uncertainty while a coalition formation model is used to determine the stable data-sharing decisions. A new method of composite coalition is proposed to study efficient markets. An alternative continuous model is proposed to handle large networks using simulation. We apply these models to various types of networks. Test results show that perfect information may lead to perfect selfishness. Sharing more data does not necessarily improve transit service for all groups, at least if transit operators remain noncooperative. Service complementarity does not necessarily guarantee a grand data-sharing coalition. These results can provide insights on policy-making, like whether city authorities should enforce compulsory data-sharing along with cooperation between operators or setup a voluntary data-sharing platform.

Shadow banking and commercial bank: evidence from China

ABSTRACT In China, commercial banks participate in shadow banking activities through interbank or channel businesses, which should be called bank’s shadow banking activities. Based on the co-opetition game model, we first analyse the fund flow mechanism between bank’s shadow banking and traditional credit business, which confirms that the greater the proportion of bank’s shadow banking investment, the higher the bank profit. By sampling 147 commercial banks in China during 2003 to 2019, we empirically study the impact of bank’s shadow banking on the individual risk of commercial bank by OLS regression and on the systemic risk of banks through the randomized effect model from the micro-level. The results confirm that Chinese bank’s shadow banking will increase the individual operating risk of commercial bank and its rapid development will increase the probability of banking system risk. Meanwhile, we find that global financial crisis has no significant effect on the risk of individual banks or banking systems, but the regulatory overhaul of bank’s shadow banking activities can significantly inhibit the individual bank’s operational risk, especially for listed banks.

Dynamic Coopetition Strategies: The Impacts of Ex ante and Ex post Heterogeneities

The paper studies dynamic strategies of heterogeneous firms cooperating with competitors. We consider firms’ ex ante heterogeneity and ex post heterogeneity in a two-period, two-player game theoretical model. Firstly, we focus on ex ante heterogeneity, i.e., asymmetric initial characteristics of firms, which results in unequal distribution of the synergistic value created through cooperation. And we take ex post heterogeneity, especially referred to learning effects, and the incentives of firms into account. Both ex ante and ex post heterogeneities help us figure out optimal coopetition strategies of firms, via investigating their coopetition game. Secondly, we introduce external value creation promoted by competition, and external value capture derived from cooperation into our model to study their single and interactive effects on coopetition incentives of each firm. The analyses enrich the dichotomy imposed in literature between “cooperation - value creation” and “competition - value capture” by providing a unified interaction perspective between cooperation, competition, value creation as well as value capture. Our model attempts to explain why and how would different types of firms cooperate with their competitors in a dynamic context.

Process R&D investment and social dilemmas

We consider a coopetitive game model of firms’ behavior in process R&D with entry cost. We compare the competitive behavior of firms in R&D with the R&D coopetition scenario. In R&D coopetition, firms engage in a bargaining process to reach a binding R&D agreement. We find that R&D competition can lead to a prisoner’s dilemma or a chicken game between market rivals. The possibility of entering a binding R&D agreement resolves the above social dilemmas associated with the firms’ competitive behavior. In turn, under R&D coopetition, for a medium level of R&D entry cost, firms may enter a trust dilemma, but it is a beneficial scenario in comparison with the corresponding R&D competition outcome.

Analysis on Altruism-Based Coopetition Game of Oligarchic Enterprises: A Validation of Generation Companies

For the long-term sustainable development, the modern enterprises should consider both competition and cooperation. In the current studies of corporate competition strategies and games, the quantification of cooperation-competition (coopetition) between enterprises is not deeply investigated. In this paper, we establish a coopetition game model of oligarchic enterprises in the industry by using the quantitative altruistic factor and nonlinear cost function, analyze the influence of altruistic factor on equilibrium variables, and then validate it in the generation side market. The following conclusions are drawn: (1) the coopetition of any form will increase the market equilibrium price and the total equilibrium profit of the industry, which induces the motivation and intention of cooperation between oligarchic enterprises. (2) The increased unilateral altruism is instable and unsustainable because it will produce an altruistic threshold that makes the total equilibrium profit of the industry increase and then decrease. The unilateral altruism of high-cost generation companies is more beneficial for increasing the total equilibrium profit of the industry, but it is realized in a difficult way. Due to a higher initial altruism level, there is lack of motivation for the increased unilateral altruism. (3) The mutually altruistic coopetition is the most effective way for improving the total equilibrium profit of the industry, but it is hard to finally achieve the complete monopoly because of cost differentiation. (4) The established game model of generation market is more universal and provides a certain quantitative interpretation for electricity crisis.

Game-Theoretic Principles of Decision Management Modeling Under the Coopetition

The paper considers the two main game-theoretic models, such as coalition and cooperative. The authors are of the opinion that definitions and notions of cooperative games and coalition games are different, but both games are coopetitive games. Transitivity and superadditivity are presented as the main characteristic functions of coopetitive games. The individual and collective rationality were identified as unconditional requirements for the optimal distribution between players. Furthermore, the additional income added to the guaranteed amount occurs in the event of coopetition. Any substantial coopetitive game has an infinite number of transactions. The authors highlighted that the dominant transaction is the transaction that is better for all coalition numbers without exceptions and it can be reached by the coalition. In addition, the authors propose using Shapley system of axioms to identify coopetitive game results.

Game Models for Closed-Supply Chain with Different Competition-Cooperation Relationships under Fairness Preference

Considering the complex problem of competition and cooperation among enterprises in the process of product selling and recycling, different coopetition game models of closed-loop supply chain with the fairness preference of a manufacturer and retailers are constructed according to the actual investigation. Then, this study primarily used fairness preference theory and game theory to analyze the impact of fairness preference on the pricing decision, recycling and remanufacturing strategy, and coopetition model selection. The results show that (1) enterprises’ fairness preference would increase the wholesale price and retail price, and the stronger the degree of fairness preference is, the more obvious the trend is; (2) enterprises’ fairness preference is not conducive to recycling and remanufacturing, and the higher level of fairness preference is associated with the lower recycling rate of waste products; (3) enterprises’ fairness preference would not affect the model selection but would benefit the overall profit.

Coopetitive games for environmental sustainability: Climate change and decision global policies

In this work, we propose and analyze a coopetitive model for the Climate Change environmental sustainability: a global duopoly type game structure, involving a generic type of green technological good. Our model allows to select certain strategy profile solutions within a continuous horizon of possible global scenarios, in the context of the Paris agreement COP21 and after Trump’s decision to abandon the agreement itself. More specifically, we construct a parametric coopetitive game with two great actors, US and the group of countries which still agree to COP21. The two actors of our duopoly game compete on the global market by producing and selling green technological goods (for example: electric cars, electric airplanes, hydrogen cars, solar panels, low impact batteries for smart houses, electric cars or self phones, and so on). Our multi-dimensional coopetitive model suggests possible cooperative strategies in order to improve the efficiency and strength of the actions enforced by the countries to mitigate the Climate Change catastrophic risk at the level of its causes and effects.

Risk management of food health hazard by meat consumption reduction: a coopetitive game approach

In this paper, we face the serious problem of food health hazard, also in connection with global food production scarcity and feeding sustainability, in view of important environmental issues and the severe incumbent climate change. Specifically, our innovative risk management approach considers cooperation among producers of vegan and non-vegan food, a strong commitment more and more observed, recently, in technologically advanced western countries. The novelty of our work consists in proposing possible quantitative agreements among complementary food producers, usually non-interacting, in order to develop a sustainable healthy food production for human population—also characterized by low impact on the planet. Another new feature of our approach lies in using coopetition and game theory together; we show, quantitatively, how to conjugate human health defense, environmental defense, economic interests and less government spending, needs which usually appear in contrast with each other. Another point of our coopetitive approach is the suggestion of an easier way to entry the global market for vegan food producers. Meanwhile, our model suggests to big producers/sellers of non-vegan food a way to smoothly and rapidly transit toward more sustainable production. Technically, we propose an innovative exemplary complex agreement among global food sellers and small (but strongly sustainable and innovative) vegan food producers. Moreover, our model implies a general saving for the countries, by mitigating the health expenditures. The result of our mathematical study suggests a novel win–win solution for global economy, world environment and governments, while improving human population sustainability and climate change effects.

Green product development under competition: A study of the fashion apparel industry

Motivated by the observed industrial issues, we analytically develop a fashion supply chain consisting of one manufacturer and two competing retailers and investigate how retail competition and consumer returns affect green product development in fashion apparel. In the basic model, that is, the pure “product greenness level” game, we find that the optimal greenness level of the fashion product decreases along with the level of market competition. This finding implies that a more competitive market leads to a lower optimal greenness level. We also identify that when the consumer return rate increases, the optimal product greenness level is substantially reduced. In the extended model with joint decisions on greenness and pricing, we find that the optimal product greenness level for the whole channel is always higher in the scenario when both retailers charge a higher retail price than in the case with a lower retail price. As such, the underdevelopment of green fashion products is a result of fashion industry features, such as an extremely competitive environment for green product development, relatively low retail prices for fashion products, and high consumer return rates. Therefore, fashion companies should join a co-opetition game for the green product market and simultaneously enhance their efficiency in managing consumer returns. To support our analytical findings, we conduct extensive industrial interviews with various representative companies. Based on this multi-methodological approach (MMA), this paper generates practice-relevant managerial insights that not only contribute to the literature, but also act as valuable references for industrialists.

Game theoretic approaches for highway infrastructure protection against sea level rise: Co-opetition among multiple players

This research investigates the influence of decision-maker behavior on policies that may be adopted for the protection of highway infrastructure against inundations resulting from sea-level rise. We develop an integrated game-theoretical decision-making framework to represent multiple co-opetitive decision-makers’ behavior and use the San Francisco Bay Area shoreline with a scenario of a 0.5 m sea-level rise as a numerical simulation study. The decision-makers’ objective is to minimize the traffic delay caused by inundations in the transportation network that lies within their geographical boundaries. Each decision-maker should determine where to build levees either only along their shoreline without cooperation or along a shared shoreline within a coalition. In this framework, each competitive decision-maker can consider cooperation to minimize its traffic delay, so its behavior can be defined as co-opetitive. We define necessary conditions for forming coalitions for multiple co-opetitive decision-makers, as well as cost-distributing rules and incentive negotiation processes within each coalition. Our model considers the effects of hydrodynamic interactions, traffic flow patterns changes as a result of inundations, and budget constraints on the costs of seashore protection. The hydrodynamics in the Bay Area are affected by the shoreline protection strategy, and closure of a highway link in one county affects traffic delays in other counties due to traffic re-routing. Thus, protection decisions made by a county have potential impacts on several other counties, and therefore counties must consider other counties’ actions. In the numerical study, we investigate the results of co-opetitive games for a range of funding scenarios. It is shown, through examples, that cooperation among counties decreases the additional delay for all participants in most cases compared to competition-only cases. In some cases, cooperation also reduces protection costs.

Coopetitive Games for Management of Marine Transportation Activity: A Study Case

In this paper, we will use coopetitive game theory to analyze a case of real coopetition among port companies, for what concerns loading and unloading of goods, within a competitive management scenario of marine transportation activities. Our research consists of the analysis of a study case involving coopetition between two real companies from which we obtained the financial and contractual data allowing us to define two modeling payoff functions, both of them based on real agreements and tariffs. We recognize actual coopetition and an asymmetric R&D alliance in this type of agreement, where a bigger enterprise deals with a smaller competitor, in order to capture more value from their activities. In particular, our model will show a precise coopetitive bi-dimensional trajectory within which we suggest, after a quantitative analysis, different kinds of solutions: the purely coopetitive solution, a Kalai-Smorodinsky solution and, finally, a transferable utility Kalai-Smorodinsky solution. Our methods provide specific strategy procedures determining win-win solutions for both.

Coopetitive Games for Sustainability of Global Feeding and Climate Change: Recent Developments

In this paper, we face the problem of global feeding sustainability and related environmental issues, with a strong attention to possible public heath improvements. In particular, we consider food producers and sellers of vegan (or vegetarian) and non-vegan (or non-vegetarian) food and we build up feasible and measurable contracts between two different food producers, in order to construct a more sustainable and healthier diet for future generations. At this aim, we use co-opetitive approach by means of game theory. Our co-opetitive approach consists in a game theory structure, which could help small local producers of vegan food a simpler entry in the global market and free significant publicity. At the same time, our mathematical construction suggests how big global producers/sellers of non-vegetarian food could develop a smooth rapid transaction to a more sustainable and healthier production/supply. Specifically, our game constitutes an asymmetric R&D alliance between McDonald’s and the local producer of the so called vegan product "Muscle of Wheat". We finally show a quantitative compromise solution, obtained by the Kalai-Smorodinsky principles, in a numerical study (exemplary) case.

Repeated game analysis of power suppliers based on dynamic coopetition process and slightly altruistic factor

In this paper, based on repeated game theory, the dynamic coopetition game model between power supply enterprises is established to analyze the long-term equilibrium from a more practical point of view. The slightly altruistic factor is used as a measurement of system cooperation degree, and the influence of the variation between slightly altruistic factor and discount rate is considered in the long-term dynamic equilibrium. The results show that only part of coopetition can find the feasible discount rate to maintain long-term equilibrium. The discount rate required by the identical altruistic relationship is relatively low and stable. The degree of altruistic difference between the two sides of the game decides the existence of the discount rate required for maintaining long-term dynamic equilibrium. This paper makes important generalization for the pre-existing equilibrium analysis method of power market and the general repeated game method, and has certain theoretical value and practical significance.

Complete study of a Coopetitive R&D Alliance

The paper proposes a mathematical model of coopetitive game that ana- lyzes general asymmetric R&D alliances. The coopetitive point of view, which con- siders both collaboration and competition together, allows to analyze the functioning of alliances that arise between small and large firms. Starting from the economic models developed in managerial doctrine and from the model of coopetitive game in- troduced by David Carf`ı, we adopt a mathematical analysis, paying attention to some of the most debated quantitative questions and some analytical topics scarcely covered in the literature: a mathematical model of coopetitive game, particularly suitable for exploring a complex type of asymmetric R&D alliances. We propose a formal coopet- itive approach, with corresponding numerical example, where the coopetitive variable of the model is a real variable. A cooperative effort is suggested even if partners are potentially competitors in the marketplace and they could shape the payoff space by the coopetitive approach. To maximize profits, we suggested: first of all, a complete Pareto analysis (introduced by David Carf`ı), secondly - to share conveniently and fairly the utilities - we propose a Kalai-Smorodinsky solution of the bargaining deci- sion problem, in which the decisional constraint is the Pareto boundary of maximum collective utility.