Behavioral Perspectives on Contracting in Supply Chains

Abstract

Information sharing is frequently discussed as a main enhancer for supply chain cooperation. This holds particularly true for environments that are characterized by asymmetrically distributed information concerning, e.g., cost parameters or end-customer demand. Yet, if the supply chain parties are profit-maximizing and fully rational, credible information sharing might not be established due to misaligned incentives. In this context, non-linear contract schemes (“screening contracts”) are intensively discussed in the supply chain coordination literature, since they coordinate the supply chain to a second-best outcome. The present work tests the applied theory via laboratory experiments. This approach allows for identifying the main critical assumptions within the theory while showing that non-predicted behavior leads to a deterioration of supply chain performance. Interestingly, the experiments reveal that – in contrast to standard assumptions - the impact of information sharing is ambiguous and dependent on several factors, such as contract flexibility and complexity.This research is co-authered with Abdolkarim Sadrieh (Professor of Economics and Management at Otto-von-Guericke University Magdeburg).

About the Presenter

Dr. Guido Voigt is Assistant Professor for Operations Management at the Otto-von-Guericke University Magdeburg. His research focuses on the Influence of Supply Risks in Supply Chains, Strategic Inventory Management, as well as the Impact of Information Sharing on Reduction of Asymmetric Information. He has published in IIE Transactions, International Journal of Production Research, and OR Spectrum. Before returning to academia Dr. Voigt worked two years as Corporate Internal Auditor at Henkel AG.

more info on Professor Dr. Guido Voigt

About the Seminar

The KLU research seminar series is a regular meeting of PhD students, Post-Docs and professors who conduct research in the field of logistics and supply chain management. The research seminar is open to the public and we happily welcome guests.