Strategic Interactions in a Supply Chain Game

MP Wellman, J Estelle, S Singh, Y Vorobeychik,
C Kiekintveld, V Soni

Computational Intelligence 21(1):1–26, 2005.

Copyright (c) 2005, Blackwell Publishing. This is the author's version of the work. It is posted here by permission of Blackwell Publishing for personal use, not for redistribution. The definitive version can be found here.

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Abstract

The TAC 2003 supply-chain game presented automated trading agents with a challenging strategic problem. Embedded within a high-dimensional stochastic environment was a pivotal strategic decision about initial procurement of components. Early evidence suggested that the entrant field was headed toward a self destructive, mutually unprofitable equilibrium. Our agent, Deep Maize, introduced a preemptive strategy designed to neutralize aggressive procurement, perturbing the field to a more profitable equilibrium. It worked. Not only did preemption improve Deep Maize's profitability, it improved profitability for the whole field. Whereas it is perhaps counterintuitive that action designed to prevent others from achieving their goals actually helps them, strategic analysis employing an empirical game-theoretic methodology verifies and provides insight about this outcome.
Earlier versions

Strategic interactions in the TAC 2003 supply chain tournament. (J Estelle, Y Vorobeychik, MP Wellman, S Singh, C Kiekintveld, and V Soni). In Fourth International Conference on Computers and Games, July 2004.

Strategic procurement in TAC/SCM: An empirical game-theoretic analysis. (J Estelle, Y Vorobeychik, MP Wellman, S Singh, C Kiekintveld, and V Soni). In AAMAS-04 Workshop on Trading Agent Design and Analysis, July 2004.