Economic analysis of an n-unit parallel redundant system based on a Stackelberg game formulation

A parallel redundancy has been researched in a great amount of literature on reliability theory. In the real circumstances, however, it is seldom observed except some systems that require much higher reliability. This is because most of the literature only look at the manufacturer’s point of view. The present study carries out an economic analysis of an n-unit parallel redundant system against a single unit system based on a Stackelberg game formulation considering both the consumer’s viewpoint and the manufacturer’s one. It clarifies quantitatively in what situation the manufacturer can increase his profit by dealing in the parallel redundant system. 2008 Elsevier Ltd. All rights reserved.