Game-Theoretic Model Assumptions Quiz

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What are the assumptions that underpin the game-theoretic model?

The selling cost for the retailer is normalized to zero (correct)

The retailer incurs a selling cost of c per unit of product sold in the direct channel

The production cost for the manufacturer is normalized to zero

The manufacturer has an advantage in the sales process

In the model, what advantage does the retailer typically enjoy in the sales process?

The retailer has zero production cost (correct)

The retailer incurs a selling cost of c per unit of product sold in the direct channel

The retailer has an advantage in real-world supply chain environments

The retailer enjoys a lower selling cost than the manufacturer

What are the two distribution channels respectively facing?

Selling costs for the retailer and production costs for the manufacturer

Retail and direct channels

Inverse demand functions (correct)

Real-world supply chain environments

What does the model assume about the selling cost for the retailer?

It is normalized to zero Signup and view all the answers

What is assumed about the production cost for the manufacturer in the model?

It is normalized to zero Signup and view all the answers

Why does the model assume a selling cost of c per unit of product sold in the direct channel for the manufacturer?

To represent the efficiency of the manufacturer in retail operations Signup and view all the answers

What does the symbol θ represent in the context of the dual-channel supply chain model?

The channel substitutability Signup and view all the answers

What does 'a > c' signify in the dual-channel supply chain model?

Manufacturer's ability to sell through both channels Signup and view all the answers

Why is the linear demand function used in the dual-channel supply chain model?

To accommodate consumer variety and channel preferences Signup and view all the answers

What does the parameter 'b' represent in the dual-channel supply chain model?

Price sensitivity to demand Signup and view all the answers

According to the given text, what does 'θ ∈ (0, 1)' imply about channel substitutability?

It implies partial substitutability between channels Signup and view all the answers

What does 'a' represent in the context of the dual-channel supply chain model?

Market size Signup and view all the answers

What does the inequality 'a/c > 3 - θ / ((1 - θ )(3 + θ ))' ensure in the dual-channel supply chain model?

Manufacturer's ability to sell through both channels in equilibrium Signup and view all the answers

What is the main implication of specifying differentiation between channels in terms of variety rather than quality?

Consumers have different channel preferences based on product variety Signup and view all the answers

What is one of the reasons for consumers to avoid online shopping, as mentioned in the text?

"Try-before-you-buy" experience available in physical stores Signup and view all the answers

'Some consumers may avoid offline shopping in bricks-and-mortar stores owing to shopping costs and nuisances' - What does this statement suggest about consumer behavior?

"Shopping costs and nuisances" influence offline shopping decisions Signup and view all the answers

Game-Theoretic Model Assumptions Quiz

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