On the Convexity of News Vendor Games

U. Ozen, H.W. Norde, M. Slikker

Research output: Working paperDiscussion paperOther research output

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Abstract

This study considers a simple newsvendor situation that consists of n retailers, all selling the same item with common purchasing costs and common selling prices.Groups of retailers might increase their expected joint profit by inventory centralization, which means that they make a joint order to satisfy total future demand.The resulting newsvendor games are shown to have non-empty cores in the literature.This study investigates convexity of newsvendor games.We focus our analysis on the class of newsvendor games with independent symmetric unimodal demand distributions after providing several examples outside this class that are not convex.Several interesting subclasses, containing convex games only, are identified.Additionally, we illustrate that these results can not be extended to all games in this class.
Original languageEnglish
Place of PublicationTilburg
PublisherMicroeconomics
Number of pages39
Volume2005-103
Publication statusPublished - 2005

Publication series

NameCentER Discussion Paper
Volume2005-103

Fingerprint

Convexity
Newsvendor
Retailers
Centralization
Profit
Purchasing
Convex games
Costs

Keywords

  • game theory
  • inventory centralization
  • newsvendor
  • convexity

Cite this

Ozen, U., Norde, H. W., & Slikker, M. (2005). On the Convexity of News Vendor Games. (CentER Discussion Paper; Vol. 2005-103). Tilburg: Microeconomics.
Ozen, U. ; Norde, H.W. ; Slikker, M. / On the Convexity of News Vendor Games. Tilburg : Microeconomics, 2005. (CentER Discussion Paper).
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Ozen, U, Norde, HW & Slikker, M 2005 'On the Convexity of News Vendor Games' CentER Discussion Paper, vol. 2005-103, Microeconomics, Tilburg.

On the Convexity of News Vendor Games. / Ozen, U.; Norde, H.W.; Slikker, M.

Tilburg : Microeconomics, 2005. (CentER Discussion Paper; Vol. 2005-103).

Research output: Working paperDiscussion paperOther research output

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Ozen U, Norde HW, Slikker M. On the Convexity of News Vendor Games. Tilburg: Microeconomics. 2005. (CentER Discussion Paper).