Supply Chain Contracting under Competition : Bilateral Bargaining vs. Stackelberg
We analyze contracting behaviors in a two-tier supply chain system consisting of competing manufacturers and competing retailers. We contrast the contracting outcome of a Stackelberg game, in which the manufacturers offer take-it-or-leave-it contracts to the retailers, with that of a bargaining game, in which the firms bilaterally negotiate contract terms via a process of alternating offers. The manufacturers in the Stackelberg game possess a Stackelberg-leader advantage in that the retailers are not entitled to make counteroffers. Our analysis suggests that whether this advantage would benefit the manufacturers depends on the contractual form. With simple contracts such as wholesale-price contracts, which generally do not allow one party to fully extract the trade surplus, the Stackelberg game replicates the boundary case of the bargaining game with the manufacturers possessing all bargaining power. In contrast, with sophisticated contracts such as two-part tariffs, which enable full surplus extraction, the two games lead to distinct outcomes. We further show that the game structure being Stackelberg or bargaining critically affects firms’ preferences over contract types and thus their equilibrium contract choices. These observations suggest that the Stackelberg game may not be a sufficient device to predict contracting behaviors in reality where bargaining is commonly observed
Year of publication: |
2016
|
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Authors: | Feng, Qi ; Lu, Lauren Xiaoyuan |
Publisher: |
[S.l.] : SSRN |
Subject: | Lieferkette | Supply chain | Verhandlungstheorie | Bargaining theory | Spieltheorie | Game theory | Wettbewerb | Competition | Vertragstheorie | Contract theory | Duopol | Duopoly | Vertrag | Contract |
Saved in:
freely available
Extent: | 1 Online-Ressource (29 p) |
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Type of publication: | Book / Working Paper |
Language: | English |
Notes: | In: Production & Operations Management, 22(3) 661-675, 2013 Nach Informationen von SSRN wurde die ursprĂĽngliche Fassung des Dokuments 2013 erstellt |
Source: | ECONIS - Online Catalogue of the ZBW |
Persistent link: https://www.econbiz.de/10014039995
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