Coordination within a Supply Chain with a Profit Sharing Contract. / Sloev, I.; Nastych, M.
2016. Paper presented at 2016 CBIM Academic Workshop, Bilbao.Research output: Contribution to conference › Paper
}
TY - CONF
T1 - Coordination within a Supply Chain with a Profit Sharing Contract
AU - Sloev, I.
AU - Nastych, M.
PY - 2016
Y1 - 2016
N2 - We analyze an equilibrium choice of a product quality within a supply chain consisting of a manufacturer and a supplier. A quality of an intermediate good is private information of the supplier and determines the quality of a final product. The manufacturer holds all bargaining power and proposes a profit sharing contract to the supplier. We show that (i) such the contract may serve as the efficient mechanism of within-chain coordination in special cases and (ii) tougher market competition may lead to a higher profit of both supplier and manufacturer.
AB - We analyze an equilibrium choice of a product quality within a supply chain consisting of a manufacturer and a supplier. A quality of an intermediate good is private information of the supplier and determines the quality of a final product. The manufacturer holds all bargaining power and proposes a profit sharing contract to the supplier. We show that (i) such the contract may serve as the efficient mechanism of within-chain coordination in special cases and (ii) tougher market competition may lead to a higher profit of both supplier and manufacturer.
KW - supply chain
KW - hold-up
KW - profit sharing
KW - quality improvement
KW - competition
M3 - Paper
T2 - 2016 CBIM Academic Workshop
Y2 - 29 June 2016 through 1 July 2016
ER -
ID: 10246838