So far we have considered only games in which the players are on
“equal footing” with respect to information, i.e., each player knows every
other player’s expected payoff with certainty for any set of chosen actions.
However, such ubiquitous knowledge is rarely present in supply
chains. One firm may have a better forecast of demand than another
firm, or a firm may possess superior information regarding its own costs
and operating procedures. Furthermore, a firm may know that another
firm may have better information, and therefore choose actions that
acknowledge this information shortcoming.
Fortunately, game theory
provides tools to study these rich issues, but, unfortunately, they do add