Sustainability of Intertwined Supply Networks: A Game-Theoretic Approach

Abstract

A formal game-theoretic model of an intertwined supply network, in full and simplified versions, is proposed. Conditions for the sustainable development of an active system are presented in general form and then specified to the class of intertwined supply networks. As an illustration, a concise example of the dynamic Cournot duopoly and a detailed example of the model of Social and Private Interests Coordination Engines (SPICE-model) for a marketing network are considered and analytically investigated and sustainability conditions are established. An important conclusion is that the sustainable development of the active system is possible only under the viability conditions satisfied simultaneously with coordinating the interests of all active agents of the system.