International vendor relations: a perspective using game theory

The globalization of retailing is occurring at an accelerating pace. For cost, quality, and style and fashion reasons retailers look worldwide for manufacturers and vendors that can meet their customers’ needs. Uses game theory to examine the conflict issues that can arise in retailer‐ international vendor relations. The game is a traditional prisoner’s dilemma in which equilibrium is non‐ co‐ operation even though co‐ operation would lead to gains by both retailer and vendor. Discusses the problems in achieving co‐ operation and the consequences of the prisoner’s dilemma. Presents four basic strategies for improving co‐ operation and vendor relations.