Wholesale Pricing under Mild and Privately Known Concerns for Fairness

被引:168
作者
Katok, Elena [1 ]
Olsen, Tava [2 ]
Pavlov, Valery [2 ]
机构
[1] Univ Texas Dallas, Naveen Jindal Sch Management, Richardson, TX 75080 USA
[2] Univ Auckland, Sch Business, Auckland 1142, New Zealand
基金
美国国家科学基金会;
关键词
BOUNDEDLY RATIONAL CUSTOMERS; BEHAVIOR; CONTRACTS; MODELS; GAMES;
D O I
10.1111/j.1937-5956.2012.01388.x
中图分类号
T [工业技术];
学科分类号
08 ;
摘要
This article studies the performance of wholesale pricing when the supply chain partners' fairness concerns are private information. We find that some properties of wholesale pricing established under complete information hold under incomplete information as well. First, wholesale pricing can coordinate the supply chain, despite the information asymmetry, when fairness concerns are strong enough. Second, in the case when an equitable profit split does not imply that the retailers profit must be higher than that of the supplier, the suppliers' equilibrium offer is never rejected. Overall, the study makes two primary contributions. First, it provides a partial characterization of the equilibrium when the conditions required for coordination do not hold, that is, when fairness concerns are mild. In this case, the model predicts that the expected market price must be exactly the same as under complete information. The channel efficiency, nevertheless, is strictly lower than under complete information. The distribution-free lower bound on channel efficiency suggests that this efficiency loss should be quite small, though. Second, it provides an experimental test of the models' predictions as well as a direct validation of the assumptions of preferences heterogeneity and mildness by obtaining the empirical distribution of the preferences. © 2012 Production and Operations Management Society.
引用
收藏
页码:285 / 302
页数:18
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