Leader Selection and Dynamics Analysis under Leader-Based Collective Bargaining for Buyers’ Alliance

Abstract

This paper focuses on the leader selection from the leader-based collective bargaining system, where buyers form an alliance and designate one of them as the leader to bargain with the supplier for a lower wholesale price of their common component. We construct the dynamic bargaining system consisting of two heterogeneous buyers and one supplier to analyze the influence of the enterprise nature and bargaining power on the leader selection. It was proved that the buyer with stronger bargaining power should be the leader. However, we find that, when the buyers are heterogeneous, the result may be different. In order to explore which factor plays a more important role in the leader selection, we design two rounds of bargaining for comparison. The interesting results imply that whether the bargaining power will reverse the leader selection in the first round depends on its growth rate. The nonlinear dynamics theory is also introduced to analyze the complex behaviors in the dynamic bargaining system. We analyze the influence of adjustment speed on the dynamic bargaining system and obtain the conditions required to maintain system stability. Considering the significance of system stability, the delayed feedback control mechanism is adopted to drive chaos back to stability.