Asymmetric Competition in B2B Spot Markets

32 Pages Posted: 3 Feb 2005

See all articles by Hila Etzion

Hila Etzion

University of Michigan, Stephen M. Ross School of Business

Edieal J. Pinker

Yale School of Management

Date Written: October 4, 2004

Abstract

We model a spot market in a make-to-stock industry with two types of suppliers: A type 1 supplier faces stochastic contracted demand and has access to the spot market for liquidating surplus, while a type 2 supplier produces only for the spot market. We find the production quantity equilibrium when the market consists of one supplier of each type and determine which supplier benefits more from the existence of the spot market and from an increase in spot market's demand. In addition, we analyze how the behavior of the supplier with contracts effects the performance of the supplier without contracts.

Keywords: Supply chain, Spot-market, B-to-B e-commerce

Suggested Citation

Etzion, Hila and Pinker, Edieal J., Asymmetric Competition in B2B Spot Markets (October 4, 2004). Simon School Working Paper No. OP 05-02, Available at SSRN: https://ssrn.com/abstract=659401 or http://dx.doi.org/10.2139/ssrn.659401

Hila Etzion

University of Michigan, Stephen M. Ross School of Business ( email )

701 Tappan Street
Ann Arbor, MI MI 48109
United States

Edieal J. Pinker (Contact Author)

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States
203-436-8867 (Phone)

HOME PAGE: http://https://som.yale.edu/faculty/edieal-j-pinker

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