Search Results for « Direct Nash Optimization »

Many Liberian small and medium-sized enterprises (SMEs) source goods from China but face high transaction frictions, including supplier-search costs, quality and compliance risk, and limited bargaining leverage. This paper develops a triadic decision framework to evaluate whether Liberian importers should pursue Direct Sourcing (DS), where the buyer negotiates separately with the supplier and a service agent, or Agent Sourcing (AS), where a procurement agent coordinates upstream and downstream contracts. We integrate (i) a centralized benchmark under stochastic demand (Weibull), (ii) decentralized profit functions under DS and AS, and (iii) generalized Nash bargaining to obtain equilibrium wholesale and service prices as well as profit allocations. Using calibrated baseline parameters ( , agent cost , supplier cost compliance cost K=2; Weibull shape κ=2 and scale λ=100; bargaining powers α=0.4, β=0.3, γ=0.5), the centralized optimum yields total expected profit of 516 at q*=83.26. Under bargaining equilibrium, both DS and AS achieve the centralized total profit (channel coordination), but AS increases the buyer’s profit from 107.90 to 129.67 (about 20.2%) and produces a more balanced surplus split between agent and supplier. Sensitivity analysis shows that the AS advantage is robust across wide ranges of costs, demand scale, and bargaining power, with buyer–agent bargaining power being the strongest driver of the buyer’s relative gain. The results imply that AS is a rational and scalable strategy for Liberian SMEs when compliance complexity and information asymmetry are high; policy recommendations include strengthening accredited agent networks and reducing procedural trade costs.

This paper presents an extension of the resuts obtained in previous work by the author concerning the application of global optimization techniques to the design of finite strategic games with mixed strategies. In that publication the Fuzzy ASA global optimization method was applied to many examples of synthesis of strategic games with one previously specified Nash equilibrium, evidencing its ability in finding payoff functions whose respective games present those equilibria, possibly among others. That is to say, it was shown it is possible to establish in advance a Nash equilibrium for a generic finite state strategic game and to compute payoff functions that will make it feasible to reach the chosen equilibrium, allowing players to converge to the desired profile, considering that it is an equilibrium of the game as well. Going beyond this state of affairs, the present article shows that it is possible to "impose" multiple Nash equilibria to finite strategic games by following the same reasoning as before, but with a slight change: using the same fundamental theorem of Richard D. McKelvey, modifying the original prescribed objective function and globally minimizing it. The proposed method, in principle, is able to find payoff functions that result in games featuring an arbitrary number of Nash equiibria, paving the way to a substantial number of potential applications.