Negotiations in Competing Supply Chains: The Kalai-Smorodinsky Bargaining Solution

• 成果类型: Article
• 署名作者: Feng, Qi; Li, Yuanchen; Shanthikumar, J. George
• 署名单位: Purdue University System; Purdue University; Tongji University
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2021.4184
• 发表日期: 2022
• 页码: 5868-5890
• 关键词: Kalai-Smorodinsky bargaining solution; Nash bargaining solution; competing supply chain; trade contingency

摘要

Supply chain contract negotiation has gained increasing attention in recent years, and the studies involving negotiations in the operations literature almost exclusively apply the concept of the Nash bargaining (NB) solution. The NB solution, however, is derived based on the axiom of independence of irrelevant alternatives (IIA), an unrealistic assumption in many contexts. Indeed, our analysis suggests that the NB solution can lead to unreasonable negotiation outcomes in supply chains with horizontal competition. As an alternative, the Kalai-Smorodinsky (KS) solution has been applied inmany fields but has not been introduced to the supply chain contexts. The KS solution is derived under the axiom of individual monotonicity in replacement of the IIAaxiom. We performa comprehensive comparison of contract negotiations under theKS andNB solutions in horizontally competing supply chains. Although theKS solution does not possess the flexibility of explicitly specifying the relative bargaining power as theNB solution does, the KS solution can appropriately capture the negotiation power shift induced by the decision ownership, the negotiation sequence, the vertical relationship, the competition intensity, the trade contingency, and the contract type. Our study sheds lights on the appropriate selection of solution concepts in studying negotiations in competing supply chains.