Incentive provision for demand information acquisition in a dual-channel supply chain

Song Huang, Xu Guan and Binqing Xiao

Transportation Research Part E: Logistics and Transportation Review, 2018, vol. 116, issue C, 42-58

Abstract: This paper studies an endogenous adverse selection model in a dual-channel supply chain setting, in which the manufacturer can offer a menu of contracts to induce the retailer to costly acquire private demand information. We derive the manufacturer’s optimal incentive provision decision and show that although the increase of acquisition cost results in higher distortion effect on the retailer’s selling quantity, such a distortion effect can be alleviated in a dual-channel setting. The manufacturer’s incentive provision exhibits a threshold policy. When demand variation is high and information acquisition cost is low, acquiring demand information does not necessarily benefit the retailer.

Keywords: Supply chain management; Information acquisition; Dual-channel; Endogenous adverse selection; Contracts (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (33)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1366554517309493
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:transe:v:116:y:2018:i:c:p:42-58

Ordering information: This journal article can be ordered from
http://www.elsevier.com/wps/find/journaldescription.cws_home/600244/bibliographic
http://www.elsevier. ... 600244/bibliographic

DOI: 10.1016/j.tre.2018.05.012

Access Statistics for this article

Transportation Research Part E: Logistics and Transportation Review is currently edited by W. Talley

More articles in Transportation Research Part E: Logistics and Transportation Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().