The purpose of this paper is to describe how the performance of a system is determined.
Systems with the same structure or function often have different performances. What makes the difference? Within a system, the various actors make their decisions by their own and their actions depend on the mechanism of the system. The actors' strategy selection under different mechanisms and the mechanism design are precisely in the range of Game Theory. This paper compares two different pricing mechanisms, the Stackelberg Game and Cournot Game, in a linear supply chain. And the obtained result of the different behavior (Pm*, Pr*) and different performance (Um*, Ur*) of the supply chain obviously approves our proposition that the operational mechanism is of great importance to the performance of the system, the same as structure.
It is the structure of the system and operational mechanism which determines the performance of the system.
The paper's limitations lie in the fact that it is not yet based on experimental evidence from real‐world systems.
Game Theory is one of the most effective methods to study the systematic mechanism, especially the mechanism designs, because it reveals the inherent nature of the systematic mechanism.
This paper points out that the mechanism which restricts each behavioral subject determines the performance of these systems. It puts forward a new region for the research of general system theory.
