On Co-opetitive Supply Partnerships with End-Product Rivals: Information Asymmetry, Dual Sourcing and Supply Market Efficiency

• 成果类型: Article
• 署名作者: Jung, Seung Hwan; Kouvelis, Panos
• 署名单位: Yonsei University; Washington University (WUSTL)
• 刊物名称: M&SOM-MANUFACTURING & SERVICE OPERATIONS MANAGEMENT
• ISSN/ISSBN: 1523-4614
• DOI: 10.1287/msom.2021.0982
• 发表日期: 2022
• 页码: 1040-1055
• 关键词: supply partnership; co-opetition; sourcing strategy; signaling game; information asymmetry

摘要

Problem definition:We consider opportunities for cooperation at the supply levelbetween twofirms that are rivals in the end-product market. One of ourfirms is vertically inte-grated (VI), has in-house production capabilities, and may also supply its rival. The other is adownstream outsourcing (DO)firm that has better market information. The DO is willing toconsider a supply partnership with the VI, but it also has the option to use the outside supplymarket.Academic/practical relevance:Such co-opetitive practices are common in industrialsupply chains, butfirms'co-opetitive strategic sourcing with the potential of information leak-age has not been examined in the literature.Methodology:We build a game-theoretic model tocapture thefirms'strategic interactions under the co-opetitive supply partnership with the po-tential information leakage.Results:The DO exploits its information advantage to obtain a bet-ter wholesale price from the VI and may use dual sourcing to protect its private information.Anticipating that, the VI may offer wholesale price concessions as an information rent to obtainthe DO's information. Our work identifies demand uncertainty and efficiency of outside supplymarket as the factors affecting the VI's pricing decision and the resulting equilibrium. Poolingequilibrium arises often, but in a few cases, the equilibrium is separating. At the separating equi-librium, the DO always single sources, either from the VI or the independent supplier depend-ing on the demand state. The VI benefits from ancillary revenue-generating opportunity, andfrom information acquisition in a separating equilibrium. On the other hand, the DO'sbenefitisa cheaper price in exchange for market information in a separating equilibrium. In the poolingcase, the DO uses dual sourcing to hide demand information, especially in the high demandcase, and to better supply the end-market through his accurate demand information.Manageri-al implications:Our work provides useful insights intofirms'strategic sourcing behaviors toefficiently deal with the potential of information leakage in the co-opetitive supply environ-ment and for the rationale behind such relationships often observed in industries