SCM Implementation Decisions Under Asymmetric Information: An Agency Approach
-
Lina Wang
,
Stephen Poelmans
Abstract
The optimization investment policy decision of SCM-supply chain management-implementation has been analysed under symmetric and asymmetric information conditions. For both conditions, SCM implementation optional decision optimizing models have been developed. In these models, both clients and vendors try to pursue their own benefits. Based upon the principal-agent theory, the models show to what extent a principal (a client) needs to pay more to an agent (a vendor) in a context of asymmetric information. For the client it is important to understand the extra costs to be able to adopt effective strategies to stimulate a vendor to perform an optimal implementation of a SCM system. The results of a simulation experiment regarding SCM implementation options illustrate and verify the theoretical findings and confirm the general notion that the less informed party is obliged to pay information rent to the better-informed party.
Supported by the Social Science Foundation of China (18BJL017) and the Natural Science Foundation of Liaoning Science and Technology Bureau (20170540439)
References
[1] Corbett C J, Groote X D, A supplier’s optimal quantity discount policy under asymmetric information. Management Science, 2000, 46(1): 445–450.10.1287/mnsc.46.3.444.12065Search in Google Scholar
[2] Cobett C J, Tang C S. Designing supply contracts: Contract type and information asymmetry. Eds. by Tayur S, Ganeshan R, Michael M. Quantitative Models for Supply Chain Management. Kluwer Academic Publishers, 2000.10.1007/978-1-4615-4949-9_9Search in Google Scholar
[3] Agrell P J, Bogetoft P. Decentralization policies for supply chain investments under asymmetric information. Managerial & Decision Economics, 2016, 38(3): 394–408.10.1002/mde.2783Search in Google Scholar
[4] Esmaeili M, Zeephongsekul P. Seller buyer models of supply chain management with an asymmetric information structure. International Journal of Production Economics, 2010, 123(1): 146–154.10.1016/j.ijpe.2009.07.016Search in Google Scholar
[5] Yao D Q, Yue X, Liu J. Vertical cost information sharing in a supply chain with value-adding retailers. Omega, 2008, 36(5): 838–851.10.1016/j.omega.2006.04.003Search in Google Scholar
[6] Xiao T, Qi X. Price competition, cost and demand disruptions and coordination of a supply chain with one manufacturer and two competing retailers. Omega, 2008, 36(5): 741–753.10.1016/j.omega.2006.02.008Search in Google Scholar
[7] Gaudet G, Lasserre P, Van Long N. Real investment decision under adjustment costs and asymmetric information. Journal of Economic Dynamics and Control, 1998, 23(1): 71–95.10.1016/S0165-1889(97)00107-3Search in Google Scholar
[8] Yuan H X, Tian Z X. Material options optimum investment problem research under asymmetric information. Management Science Journal, 2003, 6(1): 28–33.Search in Google Scholar
[9] Tsay A, Nahmias S. Modeling supply chain contracts: A review. Eds. byTayur S, Ganeshan R, Michael M. Quantitative Models for Supply Chain Management. Boston: Kluwer Academic Publishers, 2000.Search in Google Scholar
[10] Yeom S, Blachandran K, Ronen J. The role of transfer price for coordination and control within a firm. Review of Quantitative Finance and Accounting, 2000, 14(3): 161–192.10.1023/A:1008355713528Search in Google Scholar
© 2020 Walter De Gruyter GmbH, Berlin/Boston
Articles in the same Issue
- Research on the Determinants of Government Investment Effect
- Connectedness Among Economic Policy Uncertainties: Evidence from the Time and Frequency Domain Perspectives
- Well-Posedness and Exponential Estimates for the Solutions to Neutral Stochastic Functional Differential Equations with Infinite Delay
- SCM Implementation Decisions Under Asymmetric Information: An Agency Approach
- Relationships Among Perceived Value, Satisfaction, and e-Trust: An e-CRM View of Online Restaurant Consumption
- Image Defogging Algorithm Based on Sky Region Segmentation and Dark Channel Prior
Articles in the same Issue
- Research on the Determinants of Government Investment Effect
- Connectedness Among Economic Policy Uncertainties: Evidence from the Time and Frequency Domain Perspectives
- Well-Posedness and Exponential Estimates for the Solutions to Neutral Stochastic Functional Differential Equations with Infinite Delay
- SCM Implementation Decisions Under Asymmetric Information: An Agency Approach
- Relationships Among Perceived Value, Satisfaction, and e-Trust: An e-CRM View of Online Restaurant Consumption
- Image Defogging Algorithm Based on Sky Region Segmentation and Dark Channel Prior
