Abstract
The paper provides a thorough investigation of a first-time interaction between a retailer and a manufacturer who are unreliable in a cost function of the manufacturer. We consider a two-echelon supply chain of a single customized product, where parties interact via a revenue-sharing contract. The general model is formulated as a Retailer-Stackelberg game with two-sided information asymmetry. We derive the equilibrium strategy and parties’ profits when: (i) information is complete, (ii) hidden information asymmetry is present, and (iii) known information asymmetry is present. For a third scenario, we propose two different contracts to induce a Pareto-optimal information-sharing equilibrium.
Keywords
This is a preview of subscription content, log in via an institution.
Buying options
Tax calculation will be finalised at checkout
Purchases are for personal use only
Learn about institutional subscriptionsNotes
- 1.
\( s \to \infty \) means that at least one component of S tends to infinity.
References
Avinadav, T., Chernonog, T., Perlman, Y.: Consignment contract for mobile apps between a single retailer and competitive developers with different risk attitudes. Eur. J. Oper. Res. 246(3), 949–957 (2015)
Avinadav, T., Chernonog, T., Perlman, Y.: The effect of risk sensitivity on a supply chain of mobile applications under a consignment contract with revenue sharing and quality investment. Int. J. Prod. Econ. 168, 31–40 (2015)
Avinadav, T., Chernonog, T., Perlman, Y.: Mergers and acquisitions between risk-averse parties. Eur. J. Oper. Res. 259(3), 926–934 (2017)
Bian, W., Shang, J., Zhang, J.: Two-way information sharing under supply chain competition. Int. J. Prod. Econ. 178, 82–94 (2016)
Chernonog, T.: Consignment contract with revenue sharing in online retailing under strategic information sharing. Working paper, Bar-Ilan University, 2018.
Chernonog, T., Avinadav, T.: Profit criteria involving risk in price setting of virtual products. Eur. J. Oper. Res. 236(1), 351–360 (2014).
Fishburn, G.: Tax evasion and inflation. Aust. Econ. Pap. 20(37), 325–332 (1981).
Gurnani, H., Shi, M.: A bargaining model for a first-time interaction under asymmetric beliefs of supply reliability. Manag. Sci. 52(6), 865–880 (2006)
Kong, G., Rajagopalan, S., Zhang, H.: Revenue sharing and information leakage in a supply chain. Manag. Sci. 59(3), 556–572 (2013)
Lancioni, R.A., Smith, M.F., Oliva, T.A.: The role of the Internet in supply chain management. Ind. Mark. Manag. 29(1), 45–56 (2000)
Leng, M., Zhu, A.: Side-payment contracts in two-person nonzero-sum supply chain games: review, discussion and applications. Eur. J. Oper. Res. 196(2), 600–618 (2009)
Mishra, B.K., Raghunathan, S., Yue, X.: Information sharing in supply chains: incentives for information distortion. IIE Trans. 39(9), 863–877 (2007)
Mishra, B.K., Raghunathan, S., Yue, X.: Demand forecast sharing in supply chains. Prod. Oper. Manag. 18(2), 152–166 (2009)
El Ouardighi, F., Kim, B.: Supply quality management with wholesale price and revenue-sharing contracts under horizontal competition. Eur. J. Oper. Res. 206, 329–340 (2010)
Xiao, T., Yang, D.: Risk sharing and information revelation mechanism of a one manufacturer and one-retailer supply chain facing an integrated competitor. Eur. J. Oper. Res. 196(3), 1076–1085 (2009).
Xie, G., Yue, W., Wang, S., Lai, K.K.: Quality investment and price decision in a risk-averse supply chain. Eur. J. Oper. Res. 214, 403–410 (2011)
Zhang, J., Chen, J.: Coordination of information sharing in a supply chain. Int. J. Prod. Econ. 143(1), 178–187 (2013)
Zhu, X., Mukhopadhyay, S.K., Yue, X.: Role of forecast effort on supply chain profitability under various information sharing scenarios. Int. J. Prod. Econ. 129(2), 284–291 (2011)
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2018 Springer Nature Switzerland AG
About this chapter
Cite this chapter
Chernonog, T. (2018). First-Time Interaction Under Revenue-Sharing Contract and Asymmetric Beliefs of Supply-Chain Members. In: Daniele, P., Scrimali, L. (eds) New Trends in Emerging Complex Real Life Problems. AIRO Springer Series, vol 1. Springer, Cham. https://doi.org/10.1007/978-3-030-00473-6_18
Download citation
DOI: https://doi.org/10.1007/978-3-030-00473-6_18
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-00472-9
Online ISBN: 978-3-030-00473-6
eBook Packages: Mathematics and StatisticsMathematics and Statistics (R0)