An agent-based model of competition and collaboration in supply chains

This paper proposes an agent-based simulation model to study how competition and collaboration affect supply chains by looking at the problem at a market level. A theory-driven approach is applied to the modelling. The model reflects customers, manufacturers, and suppliers competing and collaborating in a supply chain strategic space. Preliminary results show that the market structure is determined primarily by bounded-rational behaviours of the supply chains and not by demand. This study is expected to provide a new perspective for understanding the implications of firms’ behaviour as supply chains to the market. It is also intended to act as a building block to study more complex and real supply chains, and encourage academics, business managers, and market regulators to invest time in studying the impact of competition and collaboration strategies in supply chains.