pareto improvement
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Author(s):  
Raphaël Lamotte ◽  
André de Palma ◽  
Nikolas Geroliminis

Several works published over the last two decades have shown for a stylized set-up with homogeneous users that metering-based priority (MBP) schemes may generate Pareto improving departure time adjustments similar to those induced by congestion pricing, but without any financial transaction. We investigate whether MBP (i) still generates significant savings and (ii) remains Pareto-improving, with various sources of heterogeneity (in schedule flexibility, desired arrival time, and capacity usage). We consider two types of schemes: one where the priority status is allocated randomly (R-MBP) and another (HOV-MBP), which only prioritizes users with small capacity usage (e.g., carpoolers). We find that the relative total cost savings of R-MBP decrease with heterogeneity in flexibility, but may increase with heterogeneity in desired arrival time. It fails however to be Pareto-improving, as nonprioritized users are almost systematically worse-off. HOV-MBP circumvents this issue by generating an ordering effect and a modal shift, which both contribute to a better distribution of benefits among users. Under favorable circumstances, they may even restore a Pareto improvement. Overall, MBP appears as a realistic way to alleviate congestion, scoring well both in terms of efficiency and social acceptability.


Entropy ◽  
2021 ◽  
Vol 23 (9) ◽  
pp. 1144
Author(s):  
Yinfei Xu ◽  
Yafei Zu ◽  
Hui Zhang

This paper investigates the optimal inter-organization control of collaborative advertising considering the myopic and far-sighted behaviors. Taking a two-echelon supply chain as an example, four kinds of differential game models including myopic Stackelberg game, far-sighted Stackelberg game, myopic cooperative game and far-sighted cooperative game are studied. The results show that the optimal advertising efforts of both manufacturer and retailer in the myopic situation decrease with time. But they remain constant in the far-sighted situation. The Pareto improvement applies to both game players from the non-cooperative game to the cooperative game. The numerical analyses are conducted to further investigate the theoretical results and to guide the inter-organization control of collaborative advertising in practice.


2021 ◽  
Author(s):  
ziyuan zhang ◽  
Liying Yu

Abstract In the context of low-carbon economy, supply chain members’ joint emission reduction issue has become a research hotspot, while there are few researches which synthetically studies the effect of consumers’ reference low-carbon effect and supply chain members’ altruistic behavior on their decisions. To study the impact of supply chain members’ altruistic behavior and consumers’ reference low-carbon effect on their joint emission reduction decisions and profits, we build optimization models under four decision scenarios, in which we solve the manufacturer’s and the retailer’s optimal emission reduction strategies and other equilibrium solutions by differential game theory. We obtain some findings. First, consumers' reference low-carbon effect will harm the profits of the manufacturer and the retailer, discourage the manufacturer's enthusiasm to reduce emissions and retailer's enthusiasm for low-carbon publicity. Second, the altruistic behavior of the manufacturer and the retailer can not only weaken the negative impact of the reference low-carbon effect, but also promote both parties to actively reduce emissions, help achieve Pareto improvement of their own profits and utilities, and obtain additional social welfare. Third, the cost-sharing contract can encourage the manufacturer to increase emission reduction investment without affecting the retailer’s low-carbon publicity investment, and can achieve a Pareto improvement of both parties’ profits and utilities. In addition, the cost-sharing ratio is only proportional to the marginal profits and altruistic intensity of both parties, and is not affected by the reference low-carbon effect. Meanwhile, the cost-sharing ratio will decrease as the manufacturer’s marginal profit and altruistic intensity increase, and will increase as the retailer’s marginal profit and altruistic intensity increase. In particular, when the retailer is completely altruistic, the cost-sharing contract can achieve perfect coordination of the supply chain.


2021 ◽  
Author(s):  
Yash Kanoria ◽  
Daniela Saban

Two-sided matching platforms can control and optimize over many aspects of the search for partners. To understand how matching platforms should be designed, we introduce a dynamic two-sided search model with strategic agents who must bear a cost to discover their value for each potential partner and can do so nonsimultaneously. We characterize evolutionarily stable stationary equilibria and find that, in many settings, the platform can mitigate wasted search effort by imposing suitable restrictions on agents. In unbalanced markets, the platform should force the short side of the market to initiate contact with potential partners, by disallowing the long side from doing so. This allows the agents on the long side to exercise more choice in equilibrium. When agents are vertically differentiated, the platform can significantly improve welfare even in the limit of vanishing screening costs by forcing the shorter side of the market to propose and by hiding information about the quality of potential partners. Furthermore, a Pareto improvement in welfare is possible in this limit. This paper was accepted by Baris Ata, stochastic models and simulation.


Games ◽  
2021 ◽  
Vol 12 (2) ◽  
pp. 42
Author(s):  
Artem Baklanov

We explore how an incremental change in complexity of strategies (“an inch of memory”) in repeated interactions influences the sets of Nash Equilibrium (NE) strategy and payoff profiles. For this, we introduce the two most basic setups of repeated games, where players are allowed to use only reactive strategies for which a probability of players’ actions depends only on the opponent’s preceding move. The first game is trivial and inherits equilibria of the stage game since players have only unconditional (memory-less) Reactive Strategies (RSs); in the second one, players also have conditional stochastic RSs. This extension of the strategy sets can be understood as a result of evolution or learning that increases the complexity of strategies. For the game with conditional RSs, we characterize all possible NE profiles in stochastic RSs and find all possible symmetric games admitting these equilibria. By setting the unconditional benchmark as the least symmetric equilibrium payoff profile in memory-less RSs, we demonstrate that for most classes of symmetric stage games, infinitely many equilibria in conditional stochastic RSs (“a mile of equilibria”) Pareto dominate the benchmark. Since there is no folk theorem for RSs, Pareto improvement over the benchmark is the best one can gain with an inch of memory.


2021 ◽  
Author(s):  
Ludwig Dierks ◽  
Sven Seuken

Cloud computing providers must constantly hold many idle compute instances available (e.g., for maintenance or for users with long-term contracts). A natural idea, which should intuitively increase the provider’s profit, is to sell these idle instances on a secondary market, for example, via a preemptible spot market. However, this ignores possible “market cannibalization” effects that may occur in equilibrium as well as the additional costs the provider experiences due to preemptions. To study the viability of offering a spot market, we model the provider’s profit optimization problem by combining queuing theory and game theory to analyze the equilibria of the resulting queuing system. Our main result is an easy-to-check condition under which a provider can simultaneously achieve a profit increase and create a Pareto improvement for the users by offering a spot market (using idle resources) alongside a fixed-price market. Finally, we illustrate our results numerically to demonstrate the effects that the provider’s costs and her strategy have on her profit. This paper was accepted by Gabriel Weintraub, revenue management and market analytics.


2021 ◽  
Vol 2021 ◽  
pp. 1-31
Author(s):  
Ying Luo ◽  
Qiang Wei ◽  
Xinyu Gou ◽  
Dai Dai ◽  
Yiran Zhou

The purpose of this study is to explore the design of equity cooperation mechanism in the sharing logistics service supply chain. This study designs a two-echelon logistics service supply chain composed of an urban joint distribution company and N logistics companies. The urban joint distribution company is jointly established by N logistics companies based on specific shares of equity investment. We establish sharing logistics service supply chain models under revenue-sharing or cost-sharing contracts. Revenue-sharing factor or cost-sharing factor is the equity cooperation parameter. When the members of the supply chain choose to cooperate in revenue-sharing or cost-sharing mechanism, not all cooperation scenarios considered in the study can achieve Pareto improvement of the total profit of the supply chain, but at least one situation can achieve Pareto improvement. This study provides feasible solutions for logistics companies to join the sharing logistics service platform and provides a reference for the operation of a joint distribution platform established by logistics companies. New results and managerial insights are derived by the sharing logistics service supply chain with revenue-sharing vs cost-sharing contracts, which enriches the interfaces of the operation of the sharing logistics service supply chain.


2021 ◽  
Vol 49 (1) ◽  
pp. 53-79
Author(s):  
E.M. Skarzhinskaya ◽  
◽  
V.I. Tsurikov ◽  

The article engages in a theoretical investigation of the possibility of implementing the Stackelberg strategy within a team. It is assumed that the team gene-rates aggregate income that increases as the efforts invested by each agent intensify, subject to the law of diminishing returns. The goal of each agent in a team is to maximize his own individual gain. In order to achieve an outcome that is Paretopreferable over Nash equilibrium, two approaches may be used: identifying a leader or forming a smaller group (coalition) within the team whose members, in pursuance of increased individual gains, choose the route that maximizes coalition gains. It is shown that the advent of a coalition in a team results in Pareto-improvement in a simultaneous game. We analyse the possibility of endogenous leadership forming according to the Stackelberg model when using the mechanism of timing decisions. It is established that under autonomy of all team members, leadership formation can only be confidently predicted in specific individual cases. In a significantly more general case, all of the prerequisites for the formation of leadership are created by the presence of a single coalition interested in implementing the Stackelberg strategy.


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