A Dominant Retailer’s Optimal Pricing Strategy to Stimulate Upstream Innovation
Consider a basic two-echelon retailer- Stackelberg supply chain in which the supplier sells a product to a retailer,who in turns retails it to the consumers.The supplier has the opportunity to invest in process innovation to reduce his marginal production cost.However,due to the existence of the classical “double marginalization and “hold-up problems,the supplier will tend to invest less than what would be optimal from the perspective of the whole supply chain.The question we pose is: how to stimulate the supplier’s innovation via appropriately designed contract format from the dominant retailer’s perspective.We examined the performance of two contract formats (namely,markup-only commitment contract,and markup commitment with lump-sum payment contract) and our results show that,markup commitment with lump-sum payment contract always dominants the markup-only commitment contract,not only because it can effectively stimulate the supplier’s innovation investment,but also it can full coordinate the supply chain.
Dominant Retailer Supply Chain Hold-up Problem Contract Design
Yaoyu Wang Wei Du
Center for Enterprise Innovation and Development, Soochow University, Suzhou, China; Dongwu Business Department of Economics and Management, Jiuzhou College of Vocation & Technology, Xuzhou, China
国际会议
苏州
英文
132-138
2013-07-08（万方平台首次上网日期，不代表论文的发表时间）