The complexity analysis of dynamic output game with risk-averse consideration

Risk aversion is prevalent behaviors of decision makers when the external environment is uncertain. In this paper, the dynamic output game strategies in two-tier supply chains under uncertain demand and competitive environment are discussed, where the supply chains include a risk-averse manufacturer and customers respectively. Two game models with a mean-variance framework are developed under decentralized and team game respectively. The complex dynamics characteristics and influences of parameters on the dynamics behaviors of two game strategies are investigated using parameter basin plots, bifurcation diagrams and the largest Lyapunov exponent et al. The results show that game strategy will affect the stability of the system, and risk reference has little effect on stability of the system while the weight parameter of the products and uncertain demand have. The instability of the system causes an unfavorable outcome and the parameter adjustment mechanism can be applied by manufacturers to eliminate the chaotic behaviors. Key–Words: Risk-averse behavior; Team decision; Parameter basin; Mean-variance method