Negotiation and Bargaining Dynamics in Multi-Tier Supply Chains: Strategies, Power Dynamics, and the Role of Technology

Document Type : IIIEC 2025

Authors

1 Industrial Engineering, babol noshirvani university of technology, Iran , Babol

2 Department of Industrial Engineering, Noshirvani University of Technology, Babol, Iran

Abstract

Objective: This study examines negotiation and bargaining dynamics in multi-tier supply chains, focusing on the interplay between distributive and integrative strategies, power imbalances, information asymmetries, and the emerging role of artificial intelligence (AI) in optimizing outcomes. The principal objective is to provide actionable insights for supply chain managers while advancing theoretical understanding of these interactions in complex, multi-tier networks across industries such as automotive, electronics, pharmaceuticals, agri-food, and e-commerce.
Methods: Employing a mixed-methods approach, the research integrates a systematic literature review of 50 peer-reviewed studies, experimental simulations with participants representing supply chain firms, and five in-depth industry case studies. A game-theoretic model extends the Balanced Principal framework to predict profit distribution and negotiation equilibria under varying conditions of bargaining power, information access, and AI influence.
Results: Findings reveal that buyers with greater bargaining power capture up to 30% higher surplus, while integrative approaches enhance overall supply chain resilience by 25%. AI-powered tools reduce negotiation duration by 15% and improve equity in outcomes by mitigating information asymmetries and optimizing concession strategies.
Conclusion: Despite these advances, limitations include the controlled nature of experiments and the context-specific scope of case studies, which may limit generalizability. The study concludes that strategic adoption of integrative bargaining and AI technologies fosters sustainable inter-firm relationships, cost efficiency, and resilience in multi-tier supply chains, offering managers practical tools to balance competitive and collaborative tactics in an increasingly complex global environment.

Keywords

References

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Management Science and Information Technology
Volume 2, Issue 2
June 2025
Pages 151-173

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