Game of elimination in a shared market: a novel multi-period game approach to competition of supply chains based on simulation

Abstract

In this research, the Game of Elimination is introduced as a novel multiple-period competitive game in a shared market. In this game, each player has a single goal of gaining more profit from the shared market and, in order to achieve this goal, tries to eliminate other players from the market by attracting their customers. In other words, the goal of each player is to increase their market share and profit simultaneously. Since all players endeavour to attract the customers of other sellers, each player must also pay attention to satisfying their own customers. The Game of Elimination proposes a simulation-based framework for interpreting and anticipating the result of competition in this scenario. After presenting the Game of Elimination in an abstract format, the dynamics of the proposed game are examined by the experimental implementation of a game in which each seller has two strategies: pricing of the product and the service level offered for the product. The results of the experiment suggest that the outcome of competition is contingent upon the profit-seeking and assimilation behaviour of the sellers.

Keywords:

• Competitive markets
• multi-period game
• price and service level
• Game of Elimination

JEL CLASSIFICATION:

• C72
• C63
• C51