Various contracts can be designed to coordinate a simple supplier–retailer channel, yet the contracts proposed in prior research and tested in a laboratory setting do not perform as standard theory predicts. The supplier, endowed with all bargaining power, can neither fully coordinate the...

This article studies the performance of wholesale pricing when the supply chain partners' fairness concerns are private information. We find that some properties of wholesale pricing established under complete information hold under incomplete information as well. First, wholesale pricing can...

The behavioral literature has demonstrated that the format of supply chain contracts matters even when theoretically it should not and that contracts that in theory coordinate channels fail to do so in laboratory experiments. The existing body of experimental evidence uses an ultimatum...

Problem definition: To improve the poor performance of supply chains caused by misaligned incentives under the wholesale price contract, theory proposes coordinating contracts. However, a common finding of experimental studies testing such contracts is that they tend to yield only a marginal, if...

A supply chain, which typically employs decentralized decision-making, iscoordinated if in the equilibrium firms make decisions that are system-wideoptimal. Such decisions, called the first-best, would be made if the supply chainwere centralized so that a single decision-maker could force all...