Game-Theoretic Model Assumptions Quiz
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Questions and Answers

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?

    <p>It is normalized to zero</p> Signup and view all the answers

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

    <p>It is normalized to zero</p> 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?

    <p>To represent the efficiency of the manufacturer in retail operations</p> Signup and view all the answers

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

    <p>The channel substitutability</p> Signup and view all the answers

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

    <p>Manufacturer's ability to sell through both channels</p> Signup and view all the answers

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

    <p>To accommodate consumer variety and channel preferences</p> Signup and view all the answers

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

    <p>Price sensitivity to demand</p> Signup and view all the answers

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

    <p>It implies partial substitutability between channels</p> Signup and view all the answers

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

    <p>Market size</p> 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?

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

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

    <p>Consumers have different channel preferences based on product variety</p> Signup and view all the answers

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

    <p>&quot;Try-before-you-buy&quot; experience available in physical stores</p> 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?

    <p>&quot;Shopping costs and nuisances&quot; influence offline shopping decisions</p> Signup and view all the answers

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