Contracting and Coordination under Asymmetric Production Cost Information

• 成果类型: Article
• 署名作者: Cakanyildirim, Metin; Feng, Qi; Gan, Xianghua; Sethi, Suresh P.
• 署名单位: University of Texas System; University of Texas Dallas; University of Texas System; University of Texas Austin; Hong Kong Polytechnic University
• 刊物名称: PRODUCTION AND OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1059-1478
• DOI: 10.1111/j.1937-5956.2011.01258.x
• 发表日期: 2012
• 页码: 345-360
• 关键词: Adverse selection; type-dependent reservation profit; CONTRACTING; Supply Chain Efficiency; Demand uncertainty

摘要

We analyze a supply chain consisting of a supplier and a retailer. The supplier's unit production cost, which characterizes his type, is only privately known to him. When trading with the retailer, the supplier demands a reservation profit that depends on his unit production cost. We model this problem as a game of adverse selection. In this model, the retailer offers a menu of contracts, each of which consists of two parameters: the ordering quantity and the supplier's share of the channel profit. We show that the optimal contract depends critically on a surrogate measurethe ratio of the types reservation profit differential to their production cost differential. An important implication from our analysis is that information asymmetry alone does not necessarily induce loss in channel efficiency. The optimal contract can coordinate the supply chain as long as the low-cost supplier's cost efficiency is neither much overvalued nor much undervalued in the outside market. We further discuss the retailer's preference of the supplier's type under different market conditions, as well as evaluate the effects of the supplier's reservation profit, the retail price, and the demand uncertainty on the optimal contract.