Incentives for Information Revelation in a Supply Chain and the Bullwhip Effect

• 成果类型: Article; Early Access
• 署名作者: Qu, Zhan; Raff, Horst; Stahler, Frank
• 署名单位: University of Gottingen; University of Kiel; Eberhard Karls University of Tubingen; Leibniz Association; Ifo Institut
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1177/10591478251378832
• 发表日期: 2025
• 关键词: INVENTORY; supply chain; Bullwhip Effect; asymmetric information; information sharing

摘要

Getting downstream firms in a supply chain to share private information about consumer demand with their suppliers is generally considered a prerequisite to dampening the bullwhip effect, that is, the amplification of demand shocks as they pass upstream in a supply chain. If downstream firms are reluctant to share their demand information, how can they best be incentivized to do so, and what does the optimal incentive scheme imply for the bullwhip effect and supply chain efficiency? We examine these questions by developing a supply chain model with asymmetric information, and show that the supplier should optimally follow a two-pronged strategy. One prong consists of the optimal incentive contract to induce information revelation. Information revelation requires a distortion in the downstream firm's orders that makes them more responsive to demand shocks, which tends to strengthen the bullwhip effect. The other prong helps to reduce this distortion and dampen the bullwhip effect. It consists of getting the downstream firm to increase its initial order and stock up on inventory before it learns about demand. A larger initial order is sufficient to eliminate the bullwhip effect if demand shocks are not too persistent. Our results hold if the marginal production cost does not increase too quickly with output and the inventory holding cost is not too high.