Implementation of optimal schedules in outsourcing with identical suppliers

Herbert Hamers, F. Klijn, M. Slikker

Research output: Contribution to journalArticleScientificpeer-review

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.
Original languageEnglish
Pages (from-to)173-187
JournalMathematical Methods of Operations Research
Volume89
Issue number2
DOIs
Publication statusPublished - Apr 2019

Keywords

  • game theory
  • outsourcing
  • scheduling
  • efficiency
  • implementation
  • nash equilibrium
  • correlated equilibrium
  • price of stability

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