Analysis on Capacity Sharing with Failed Match Based on the Evolutionary Game Theory

Abstract

There is a problem of capacity mismatch between different companies in the current market. In this paper, we propose a dual-channel capacity sharing supply chain consisting of two competing manufacturers (i.e. a capacity seller and a capacity buyer) and one platform. Considering the gap of matching success rates, we investigate whether the buyer and seller can benefit from capacity sharing and how the different matching success rates influence the manufacturers’ decisions on spontaneously match through a platform. Through numerical simulation, we find that (1) the seller can always benefit from capacity sharing even when the match fails, while the buyer benefits from capacity sharing only when the capacity constraint is relatively severe; (2) both the buyer and seller prefer to participate through the platform when the platform has a sufficiently high advantage in matching success rates; (3) if the capacity constraint is much severe, the capacity buyer may turn to self-match rather than capacity sharing. Besides, we also study the sustainability of the capacity-sharing system and show how the platform can improve sustainability by forgoing accumulated profits.