Enabling Opportunism: Revenue Sharing when Sales Revenues are Unobservable

• 成果类型: Article
• 署名作者: Heese, H. Sebastian; Kemahlioglu-Ziya, Eda
• 署名单位: European Business School (EBS) University; North Carolina State University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/poms.12163
• 发表日期: 2014
• 页码: 1634-1645
• 关键词: Supply Chain Management; revenue-sharing contracts; Noncooperative game theory

摘要

We consider a supply chain with a supplier that sells to a retailer under a revenue-sharing arrangement. Demand is uncertain and unobservable to the supplier. We assume that the retailer is rational, that is, the retailer behaves opportunistically and underreports sales revenues to the supplier whenever such underreporting is profitable. Assuming the supplier has the ability to audit the retailer and learn about the actual sales revenues, we show that the supplier will never find it optimal to audit to the point that ensures truthful reporting for all demand realizations. By committing to an auditing policy, the supplier can exploit retailer opportunism and derive profits that at times even exceed those that could be obtained when dealing with a retailer that always strictly adheres to the agreed-upon contract terms. We also show that the retailer's opportunistic behavior can increase total supply chain profits.