Interchange fee rate, merchant discount rate, and retail prices in a credit card network : a game-theoretic analysis

We consider two game-theoretic settings to determine the optimal values of an issuer\u27s interchange fee rate, an acquirer\u27s merchant discount rate, and a merchant\u27s retail prices for multiple products in a credit card network. In the first setting, we investigate a two-stage game problem in which the issuer and the acquirer first negotiate the interchange fee rate, and the acquirer and the retailer then determine their merchant discount rate and retail prices, respectively. In the second setting, motivated by the recent U.S. bill H.R. 2695, we develop a three-player cooperative game in which the issuer, the acquirer, and the merchant form a grand coalition and bargain over the interchange fee rate and the merchant discount rate. Following the cooperative game, the retailer makes its retail pricing decisions. We derive both the Shapley value- and the nucleolus-characterized unique rates for the grand coalition. Comparing the two game settings, we show that the participation of the merchant in the negotiation process can result in the reduction of both rates. Moreover, the stability of the grand coalition in the cooperative game setting may require that the merchant should delegate the credit card business only to the issuer and the acquirer with sufficiently low operation costs. We also find that the large, highly-specialized merchants and banks are more likely to join the cooperative negotiation whereas the small firms may prefer the two-stage game setting. Our numerical experiments demonstrate that the acquirer\u27s and the issuer\u27s unit operation costs more significantly impact both rates in the cooperative game setting than in the two-stage game setting

Interchange fee rate, merchant discount rate and retail prices in a credit card network: A game-theoretic analysis

We consider two game-theoretic settings to determine the optimal values of an issuer's interchange fee rate, an acquirer's merchant discount rate, and a merchant's retail price in a credit card network. In the first setting, we investigate a two-stage game problem in which the issuer and the acquirer first negotiate the interchange fee rate, and the acquirer and the retailer then determine their merchant discount rate and retail price, respectively. In the second setting, motivated by the recent US bill “H.R. 2695,” we develop a three-player cooperative game in which the issuer, the acquirer, and the merchant form a grand coalition and bargain over the interchange fee rate and the merchant discount rate. Following the cooperative game, the retailer makes its retail pricing decision. We derive both the Shapley value- and the nucleolus-characterized, and globally-optimal unique rates for the grand coalition. Comparing the two game settings, we find that the participation of the merchant in the negotiation process can result in the reduction of both rates. Moreover, the stability of the grand coalition in the cooperative game setting may require that the merchant should delegate the credit card business only to the issuer and the acquirer with sufficiently low operation costs. We also show that the grand coalition is more likely to be stable and the U.S. bill “H.R. 2695” is thus more effective, if the degree of division of labor in the credit card network is higher as the merchant, acquirer, and issuer are more specialized in the retailing, acquiring, and issuing operations, respectively. © 2012 Wiley Periodicals, Inc. Naval Research Logistics, 201

Linking supply chain quality integration with mass customization and product modularity

Supply chain quality management has received increasing attention from researchers and practitioners in recent years. However, the knowledge about the effects of a manufacturer's design and production capabilities on supply chain quality management is limited. In this study, we propose a model to investigate the effects of mass customization and product modularity on supply chain quality integration (i.e. internal, supplier, and customer quality integration) and the impact of supply chain quality integration on competitive performance. We use data collected from 317 global manufacturers to empirically test the conceptual model. The results show that mass customization and product modularity directly improve internal quality integration, and product modularity also improves internal quality integration indirectly through mass customization. Product modularity improves supplier quality integration directly, and both mass customization and product modularity improve supplier quality integration indirectly through internal quality integration. Mass customization improves customer quality integration both directly and indirectly through internal quality integration, and product modularity improves customer quality integration indirectly through mass customization and internal quality integration. We also find that supplier quality integration directly enhances competitive performance, and internal quality integration enhances competitive performance both directly and indirectly through supplier quality integration. Our findings contribute to production and quality management literature and practices

Effects of social capital on operational performance: impacts of servitisation

Studies on servitisation have largely overlooked the roles of social capital with suppliers and knowledge management. We propose a moderated mediation model to investigate the impacts of servitisation on the mechanisms through which social capital with suppliers improves operational performance. The hypotheses are empirically tested using structural equation modelling and data collected from 276 manufacturing firms in China. The results show that social capital improves operational performance both directly and indirectly through knowledge management, and the relationships are influenced by servitisation. In particular, social capital improves operational performance directly and indirectly through knowledge combination in servitised firms, whereas social capital only improves operational performance indirectly through knowledge acquisition in traditional manufacturers. The findings contribute to the literature by revealing that the effects of social capital with suppliers on operational performance are partially mediated by knowledge acquisition and knowledge combination and the mediation effects are moderated by servitisation, and by providing insights into how to design purchasing and production systems to profit from servitisation

Absorptive capacity and mass customization capability

Purpose The purpose of this paper is to investigate the effects of a manufacturer’s absorptive capacity (AC) on its mass customization capability (MCC). Design/methodology/approach The authors conceptualize AC within the supply chain context as four processes: knowledge acquisition from customers, knowledge acquisition from suppliers, knowledge assimilation, and knowledge application. The authors then propose and empirically test a model on the relationships among AC processes and MCC using structural equation modeling and data collected from 276 manufacturing firms in China. Findings The results show that AC significantly improves MCC. In particular, knowledge sourced from customers and suppliers enhances MCC in three ways: directly, indirectly through knowledge application, and indirectly through knowledge assimilation and application. The study also finds that knowledge acquisition significantly enhances knowledge assimilation and knowledge application, and that knowledge assimilation leads to knowledge application. Originality/value This study provides empirical evidence of the effects of AC processes on MCC. It also indicates the relationships among AC processes. Moreover, it reveals the mechanisms through which knowledge sourced from customers and suppliers contributes to MCC development, and demonstrates the importance of internal knowledge management practices in exploiting knowledge from supply chain partners. Furthermore, it provides guidelines for executives to decide how to manage supply chain knowledge and devote their efforts and resources in absorbing new knowledge for MCC development

Ship Target Automatic Detection Based on Hypercomplex Flourier Transform Saliency Model in High Spatial Resolution Remote-Sensing Images

Efficient ship detection is essential to the strategies of commerce and military. However, traditional ship detection methods have low detection efficiency and poor reliability due to uncertain conditions of the sea surface, such as the atmosphere, illumination, clouds and islands. Hence, in this study, a novel ship target automatic detection system based on a modified hypercomplex Flourier transform (MHFT) saliency model is proposed for spatial resolution of remote-sensing images. The method first utilizes visual saliency theory to effectively suppress sea surface interference. Then we use OTSU methods to extract regions of interest. After obtaining the candidate ship target regions, we get the candidate target using a method of ship target recognition based on ResNet framework. This method has better accuracy and better performance for the recognition of ship targets than other methods. The experimental results show that the proposed method not only accurately and effectively recognizes ship targets, but also is suitable for spatial resolution of remote-sensing images with complex backgrounds