Journal article
Incentives for cost misrepresentation in supply chains
International journal of economic theory, Vol.7(2), pp.157-178
06/2011
DOI: 10.1111/j.1742-7363.2011.00156.x
Abstract
This paper investigates sequential manufacturer-retailer price determination and channel performance under possible misrepresentation by one member of its privately known cost. To the standard double marginalization game, we add a preliminary stage where the manufacturer (alternately the retailer) announces its privately known constant marginal cost. We prove that the manufacturer has no incentive to misrepresent its cost, and we give respective sufficient conditions on the demand function for the retailer to overreport and to underreport costs. Depending on the shape of the demand function, opportunistic behavior by the retailer may lower or raise the manufacturer's profit and channel performance.
Details
- Title: Subtitle
- Incentives for cost misrepresentation in supply chains
- Creators
- Rabah Amir - University of ArizonaThierry Leiber - University of Franche-ComtéIsabelle Maret - University of Strasbourg
- Resource Type
- Journal article
- Publication Details
- International journal of economic theory, Vol.7(2), pp.157-178
- Publisher
- Wiley
- DOI
- 10.1111/j.1742-7363.2011.00156.x
- ISSN
- 1742-7355
- eISSN
- 1742-7363
- Number of pages
- 22
- Language
- English
- Date published
- 06/2011
- Academic Unit
- Economics
- Record Identifier
- 9984380555702771
Metrics
2 Record Views