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First-Time Interaction Under Revenue-Sharing Contract and Asymmetric Beliefs of Supply-Chain Members

  • Tatyana ChernonogEmail author
Chapter
Part of the AIRO Springer Series book series (AIROSS, volume 1)

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

Revenue sharing contract Asymmetric information Supply chain management 

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Copyright information

© Springer Nature Switzerland AG 2018

Authors and Affiliations

  1. 1.Department of ManagementBar-Ilan UniversityRamat-GanIsrael

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