Document Type
Journal article
Source Publication
European Journal of Operational Research
Publication Date
1-16-2014
Volume
232
Issue
2
First Page
393
Last Page
404
Publisher
Elsevier BV
Keywords
Retail space-exchange; Bargaining power; Generalized Nash bargaining scheme; Weighted Shapley value
Abstract
We analyze retail space-exchange problems where two or more retailers exchange their excess retail spaces to improve the utilization of their space resource. We first investigate the two-retailer space exchange problem. In order to entice both retailers with different bargaining powers to exchange their spaces, we use the generalized Nash bargaining scheme to allocate the total profit surplus between the two retailers. Next, we consider the space-exchange problem involving three or more retailers, and construct a cooperative game in characteristic function form. We show that the game is essential and superadditive, and also prove that the core is non-empty. Moreover, in order to find a unique allocation scheme that ensures the stability of the grand coalition, we propose a new approach to compute a weighted Shapley value that satisfies the core conditions and also reflects retailers’ bargaining powers. Our analysis indicates that the space exchange by more retailers can result in a higher system-wide profit surplus and thus a higher allocation to each retailer under a fair scheme.
DOI
10.1016/j.ejor.2013.07.013
Print ISSN
03772217
E-ISSN
18726860
Publisher Statement
Copyright © 2014 Elsevier B.V. All rights reserved. Access to external full text or publisher's version may require subscription.
Full-text Version
Accepted Author Manuscript
Language
English
Recommended Citation
Leng, M., Parlar, M., & Zhang, D. (2014). Cooperative game analysis of retail space-exchange problems. European Journal of Operational Research, 232(2), 393-404. doi: 10.1016/j.ejor.2013.07.013