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Dynamic Gaming and Risk-Incorporated Bargaining Decision Support Model for Strategic Alliance Projects |
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PP: 677S-684S |
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Author(s) |
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Minren Yan,
Taining Yang,
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Abstract |
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| Increasing demand for differentiated products and services promotes project businesses, and many project-based strategic alliances have become innovative business solutions to obtain synergistic competitiveness in the highly competitive market. However, while two profit-oriented companies intend to form a strategic alliance for an expected return, it is very difficult to reach an agreement in terms of sharing risks and rewards. If the risks and rewards are not properly shared in the bargaining process, the alliance would be unstable for long-term business. Thus, a bargaining decision support model is needed to estimate acceptable rewards of the cooperative parties. This is crucial to ensure a win-win situation in the bargaining. In this paper, game theory, fuzzy set theory, and utility theory are used as complementary methodologies to develop a risk-incorporated bargaining decision support model (RBDSM) for supporting business pricing decisions in project-based alliances. Factors of bargaining power and cooperation risk are considered in the proposed RBDSM. The model can properly support decision makers in examining equilibrium prices under various bargaining conditions. A case study is provided to demonstrate the model’s applications and benefits. |
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