Table Of ContentInternational Series in
Operations Research & Management Science
Pierre-Olivier Pineau
Simon Sigué
Sihem Taboubi Editors
Games in
Management
Science
Essays in Honor of Georges Zaccour
International Series in Operations Research
& Management Science
Volume 280
SeriesEditor
CamilleC.Price
DepartmentofComputerScience,StephenF.AustinStateUniversity,
Nacogdoches,TX,USA
AssociateEditor
JoeZhu
FoisieBusinessSchool,WorcesterPolytechnicInstitute,Worcester,MA,USA
FoundingEditor
FrederickS.Hillier
StanfordUniversity,Stanford,CA,USA
Moreinformationaboutthisseriesathttp://www.springer.com/series/6161
Pierre-Olivier Pineau • Simon Sigué
Sihem Taboubi
Editors
Games in Management
Science
Essays in Honor of Georges Zaccour
123
Editors
Pierre-OlivierPineau SimonSigué
ChairinEnergySectorManagement FacultyofBusiness
HECMontréalEnergySectorManagement AthabascaUniversity
Montréal,QC,Canada Athabasca,AB,Canada
SihemTaboubi
DepartmentofMarketing
GERADandHECMontréal
Montréal,QC,Canada
ISSN0884-8289 ISSN2214-7934 (electronic)
InternationalSeriesinOperationsResearch&ManagementScience
ISBN978-3-030-19106-1 ISBN978-3-030-19107-8 (eBook)
https://doi.org/10.1007/978-3-030-19107-8
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Preface
This volume is written to mark the 60th birthday of Professor Georges Zaccour.
The contributors, who are either former Ph.D. students or successful research
collaborators and friends of Professor Zaccour, want to take this opportunity to
acknowledgehiscontributionsandtohonorhismanyscientificachievements.
It would be unrealistic and inadvisable to attempt to give a full account of
Georges Zaccour’s scientific achievements in a book preface. We hope, however,
thatthefewpointsbelowwillhelpthereaderappreciatetheextentofhiscontribu-
tiontoscience.
Allthingsconsidered,GeorgesZaccourisoneofthemostprolificscholarsofhis
generation in the fields of operations research and management science. His work
covers theoretical developments as well as applications of dynamic optimization
anddynamicgamesinvariousfieldsincludingeconomics,energy,theenvironment,
marketing, and supply chain management. His work is published regularly in top-
ranked journals and is funded by the Natural Sciences and Engineering Research
Council of Canada and the Social Sciences and Humanities Research Council of
Canada. His publications include 4 books, 14 edited volumes, over 150 refereed
journalarticles,and24chaptersineditedbooks.HisGoogleScholarprofilereflects
theimpactsofhiscontributionsinhisresearchfields(closeto6000citationsandan
hindicatorof39).Amongmanyscientificdistinctionsandawards,GeorgesZaccour
isafellowoftheRoyalSocietyofCanadaandarecipientofthe2018IsaacsAward
forhisoutstandingcontributiontothetheoryandapplicationofdynamicgames.A
completelistofhispublicationsisincludedinthisbook.
Service to and leadership in the scientific community have always been a
top priority for Georges Zaccour. Among other things, he is the editor in chief
of Dynamic Games and Applications, and the associate editor of International
Game Theory Review, Environmental Modeling & Assessment, Computational
ManagementScience,andINFOR,andhesitsontheeditorialboardsofseveralother
prestigiousjournalsinvariousfields.HeistheholderoftheChairinGameTheory
and Management at HEC Montréal and a former president of the International
SocietyofDynamicGames(ISDG,2002–2006).Heisalsoaformerdirectorofthe
GroupforResearchinDecisionAnalysis(GERAD,2001–2005),aworld-renowned
v
vi Preface
researchcenterinoperationsresearchandmanagementsciencethatbringstogether
severaluniversitiesinMontréal.
But perhaps Georges Zaccour’s most significant contribution to science is his
dedication to, passion for, and unparalleled skill at training graduate students and
hisabilitytohelpthemdevelopintothrivingresearchers.Thankstohisoutstanding
work in this area and his capacity to create a blossoming research environment,
the future of research in the field of differential games and their applications in
management science has never been as promising as it is today. Over the years,
ProfessorZaccourhascreatedascientificfamilyofmorethan35Ph.D.andpost-doc
graduates, who are established in seven different countries across four continents.
Thisfamilywillsoongrow,withtheadditional15studentscurrentlyworkingunder
hissupervision.
ProfessorGeorgesZaccourwithhisPh.D.students.Fromlefttoright:Pierre-OlivierPineau,Sihem
Taboubi,SimonSigué.9thISDGSymposium,Adelaide,SouthAustralia,December18–21,2000.
We, the editors of this volume and the organizers of the 11th Workshop on
DynamicGamesandManagementScience(Montréal,October,24–25,2019),being
held in his honor, were among Professor Zaccour’s first Ph.D. students (2000,
1999,and2002,respectively).Wehavetheprivilegeofpubliclyacknowledgingthe
extraordinary support and mentorship he has provided us, first during our training
at HEC Montréal, and later in our respective careers and personal lives. What we
have become, we owe to him. It goes without saying that we are very proud to be
partofProfessorZaccour’smultigenerationalscientificfamily,whichincludesnot
Preface vii
only his extensive network of distinguished collaborators and friends worldwide,
but also, as of this volume, his daughter, Suzanne Zaccour. Suzanne, the youngest
contributortothiscollection,ispursuingaPh.D.withtheFacultyofLawatOxford
University.WithMichèleBreton,shehasco-authoredachapterthatopensdoorsto
newapplicationsofmanagementscienceinthefieldoflaw.
Contentsofthe Book
This book collects 21 chapters reviewed according to international journal stan-
dards. The chapters cover theoretical developments in game theory and present a
broad spectrum of their applications in management science. These applications
include such areas as cyber defense, energy, and environmental management,
healthcaremanagement,marketing,andsupplychainmanagement.
Wehavedividedthevolumeintothreeparts.PartI,composedofsixchapters,is
dedicatedtoMarketingandSupplyChainGames.InChap.1,S.JørgensenandS.P.
Siguéinvestigateadifferentialgamethattakesplaceinaduopolisticmarketwhere
firmscontroltheiradvertisingandpricingdecisions.Anovelaspectoftheirstudyis
thattheyintroducepriceasanadditionalinstrumentusedbycompetingfirmsinthe
commonly used Lanchester model, which originally solely captured the effects of
advertisingcompetitionontheevolutionofthefirms’marketshares.InChap.2,G.
Martín-HerránandS.Taboubistudythepricingofoptionalcontingentproducts(i.e.,
a set of products that includes one that is useless without the other) and compare
prices and profits when these products are sold by the same company or by two
separatefirmslinkedbytheinterdependencyoftheirproductdemand.Theirstudy
provides an interesting “logical experimental” perspective on marketing modeling
andgametheory,twoareasofexpertiseofProfessorZaccour.InChap.3,S.Karray
conducts one of the first studies to examine the efficiency of rebate programs
in marketing channels where competition is considered at both the manufacturer
and retailer levels. Rebate programs are price discounts that consumers acquire
by purchasing a product at an initial period and that they then use on the next
purchasing occasion. The author uses a two-period game, where manufacturers
decide in the first period whether or not to implement a rebate program, while
retailers react by fixing the rebate level and the price to consumers. Retailers
also set the retail prices in period 2 by taking into account the decisions made
in the first period. Backward induction is used to solve the games under three
scenarios, in which the rebate program can be implemented or not by one or both
manufacturers in the distribution channel. In Chap. 4, L. Lambertini deals with
the issue of channel coordination through the use of two-part tariffs. These are
price mechanisms that manufacturers can use in order to allow a decentralized
channel to replicate the results of a vertically integrated one. The author extends
the study of Zaccour (2008), on the efficiency of such mechanisms in a dynamic
setting, by introducing competition both upstream and downstream. In Chap. 5,
O.Rubelstudiescontractualagreementsintheeventofmajorcrisiseventsfroma
viii Preface
channel’sperspective.Heusesastochasticdifferentialgameinabilateralmonopoly
to examine the impact of a product recall on the pricing strategies and profits of
both firms. The author investigates whether vendor agreements, which are signed
before any unit is sold, could aggravate the double-marginalization problem in
the channel, for two recall cost structures. In Chap. 6, P. De Giovanni and T. S.
Gencinvestigateaclosed-loopsupplychainwherememberscanimplementeithera
traditionalwholesalepricingcontractorarevenue-sharingcontract.Unlikeprevious
studies,wherethereturnrateissolelyaffectedbythemanufacturer’sgreenefforts,
the authors introduce the retail prices set by the retailer into the dynamics, and
demonstrate that this variable plays a key role in identifying the best contract for
achievingcoordinationandforreachingenvironmentalobjectives.
PartIIcontainssixchaptersdedicatedtoResourcesGames,whichalsoincludes
environmental and climate topics. In Chap. 7, O. Bahn and A. Haurie formulate
a steady-state game model with two types of production economy (“dirty” and
“clean”) and two types of emission-reduction technology (investment in carbon
capture and sequestration, and a technology of direct air capture). Their model
presents the results of negotiations among different coalitions of countries in
managing a net-zero Greenhouse Gas (GHG) emissions regime. The authors use
it to compute and compare various environmental and economic indicators (i.e.,
GHG emissions, capital stocks, labor allocation, consumption) obtained under a
Nash game and a cooperative game. In Chap. 8, H. Dawid, R. F. Hartl, and P.
M. Kort build a general dynamic model for a firm that uses as an input in its
production process an energy that can be delivered either conventionally or by
building a stock of green energy capital. The authors analyze variations of this
model and examine the impacts on the results. A key element is their explicit
modeling of the positive side effect of investing in green energy. This is done to
capture the fact that firms investing in green energy are positioning themselves as
“greenfirms,”whichhelpsenhance theimpactoftheiradvertisingeffortsontheir
goodwillandondemand.InChap.9,D.TasneemandH.Benchekrounreviewthe
experimental literature that analyzes the behavior of agents in dynamic common-
pool resource games (such as fisheries, forestry, and water). The authors propose
a classification of this literature into three groups: studies that compare behavior
to predictions of cooperative and noncooperative theoretical benchmarks in the
presenceofdynamicexternalities;studiesthataimtofindbehavioralsupportforthe
useofspecifictypesofstrategies;andstudiesthatexaminebehaviorsinacontinuous
timesetting.InChap.10,D.ClaudeandM.Tidballstudyverticalexternalitiesand
strategic delegation, a topic that links two fields of research to which Professor
Zaccour has made significant contributions: interactions in marketing channels,
andenvironmentalandresourceeconomics.Theauthorsconsideraverticalmarket
structurewithanupstreammonopoly,whichfixestheinputprice,andadownstream
quantitycompetition,wherefirmsgeneratepollutionemissionswhentheyprocess
theintermediateproductintoafinalgood.Theycomputeandcomparetheresultsof
theirmodelundertwoscenarios,dependingonwhethertheupstreammonopolistis
able to pre-commit to a fixed input price or whether it relies on a flexible pricing
scheme. In Chap. 11, J. de Frutos and G. Martín-Herrán use a linear-quadratic
Preface ix
transboundary pollution game to illustrate how nonlinear incentive strategies can
sustain an agreement over time. The authors use a less restrictive definition of
incentive equilibria with respect to the existing literature, in the sense that they
look for an incentive strategy equilibrium that allows the pollution stock under a
noncooperativemodeofplaytobecloseenough,butnotnecessarilyidentical,toits
valueundercooperation.Theauthorscomparetheincentiveequilibriumstrategies,
theircredibility,andtheplayers’payoffunderopen-loopandMarkovianstrategies.
InChap.12,F.J.AndréandL.M.Castrosurveytheliteratureonemissiontrading
undermarketpower.Theydevelopaunifyingtwo-periodmodelthatallowsthemto
replicate some of the main results in this literature and to analyze the relationship
between permit prices and the degree of competition in the output and emissions
markets for different market structures (depending on which is the mainstream
market).
Finally, Part III deals with Social Games. It combines nine chapters on various
topics related to health, security, social norms, the law, etc., including some
theoretical developments in game theory. In Chap. 13, M. Breton and S. Zaccour
launch a new and original conversation between the law and game theory on the
personhoodstatusofenvironmentalentities.Bygrantingpersonhoodstatustoariver
sufferingfromafirm’spollutingactivities,theauthorsallowtherivertobecomean
activedownstreamplayerinacooperativegame.Theyshowthatcooperationwith
environmentalentitieshavingapersonhoodstatusmaybepreferabletoalternative
solutions such as laissez-faire, government regulation, and noncooperative or
cooperativesolutionsinvolvinginterestedparties.
In Chap. 14, N. Van Long introduces the concept of a feedback Kant-Nash
equilibrium in a discrete time model of resource exploitation. The author revisits
thewell-knowndynamicmodelofthetragedyofthecommons,whereheconsiders
a subset of Kantian agents guided by a moral norm. This norm allows them
to explain their actions according to different rules than those used by rational
agents (i.e., Nashians). One of the main results obtained is that, even without
external punishment for violations of social norms, if a sufficiently large fraction
of the population consists of Kantian agents, the tragedy of the commons can be
substantiallyattenuated.
In Chap. 15, E. Billette de Villemeur and P. Pineau investigate the double
prisoner’s dilemma resulting from the fact that some individuals continue to
consume increasing amounts of oil, despite their high price, while at the same
time, environmental militants oppose production in the oil industry. The authors
examine the impacts on the individual and collective outcomes of two sets of
choices: being an environmental militant or not, and adopting for a frugal level
of energy consumption or not. One of their main results indicates that the highest
collective outcome is obtained when frugal behavior is adopted but militancy is
avoided. This result allows them to conclude that effective environmental action
shouldavoidopposingoilsupplysources,whileencouragingconsumerstobecome
morefrugal.
In Chap. 16, F. Cabo, A. Garcia-Gonzales, and M. Molpeceres-Abella study
compliancewithsocialnormsthatareoptimallyestablishedbyabenevolentcentral
