Essays on strategic interactions between firms in the presence of competition
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Strategic interactions between competing players of supply chains are studied in this dissertation in the context of supplier encroachment and forced information sharing. Although there has been extensive study of supplier encroachment, our study is the first to explicitly consider the possibility that a reseller sells more than one product, which occurs often in practice. In the first two essays, we develop a model of two suppliers who sell partially substitutable products through a single reseller, and allow for one of them to introduce its own direct channel. We find that the presence of the second supplier alters many of the existing results about the interactions between a reseller and an encroaching supplier. In the third essay, in the context of drug shortages, we investigate the role of information sharing between manufacturers about their supply disruptions. The quality problems and disruptions in capacity are the most prevalent cause of shortages of sterile injectable drugs. The capacity decision in the manufacturing facility has a significant impact on the availability of the drug, and thereby on the drug shortages. Therefore, we model the capacity decisions of manufacturing firms in terms of reliable and unreliable capacities, and study their impact on the supply of drugs. We quantify the benefit of the mitigation strategies such as forced information sharing and tax subsidies.