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Book Chapter: Should a Stackelberg-dominated supply-chain player help her dominant opponent to obtain better system-parameter knowledge?

TitleShould a Stackelberg-dominated supply-chain player help her dominant opponent to obtain better system-parameter knowledge?
Authors
Issue Date2011
PublisherSpringer
Citation
Should a Stackelberg-dominated supply-chain player help her dominant opponent to obtain better system-parameter knowledge?. In Choi, TM and Cheng, TCE (Eds.), Supply chain coordination under uncertainty, p. 379-401. Berlin: Springer, 2011 How to Cite?
AbstractA manufacturer (Manu) supplies a product to a retailer (Reta). The uncertain knowledge of the dominant player (which may be either Manu or Reta) about a system parameter is represented by a subjective probability distribution. At the time when the dominant player is designing the supply or purchase contract, should the dominated player help the dominant player to improve his imperfect system-parameter knowledge? Can the dominant player induce the dominated player to share her superior knowledge by using (or by threatening to use) sophisticated “channel-coordinating” contract formats? It is likely that one would surmise from the literature that the answer to both questions is “yes”. However, this chapter shows that very often the correct answer is “no”. Specifically, for the basic cost and market parameters, we show that the dominated player is (1) always motivated to mislead the dominant player to have a biased mean value for his subjective distribution; and (2) motivated, over a wide range of likely conditions, to increase the variance of the dominant player’s subjective distribution. Moreover, the dominant player cannot narrow this range of confusion-encouraging conditions by using a more sophisticated contract format such as a “menu of contracts.” Our results highlight the need to develop arrangements that can actually motivate a dominated player to share knowledge honestly.
Persistent Identifierhttp://hdl.handle.net/10722/166817
ISBN

 

DC FieldValueLanguage
dc.contributor.authorWang, JCen_US
dc.contributor.authorLau, AHen_US
dc.contributor.authorLau, HSen_US
dc.date.accessioned2012-09-20T08:50:01Z-
dc.date.available2012-09-20T08:50:01Z-
dc.date.issued2011en_US
dc.identifier.citationShould a Stackelberg-dominated supply-chain player help her dominant opponent to obtain better system-parameter knowledge?. In Choi, TM and Cheng, TCE (Eds.), Supply chain coordination under uncertainty, p. 379-401. Berlin: Springer, 2011en_US
dc.identifier.isbn9783642192562-
dc.identifier.urihttp://hdl.handle.net/10722/166817-
dc.description.abstractA manufacturer (Manu) supplies a product to a retailer (Reta). The uncertain knowledge of the dominant player (which may be either Manu or Reta) about a system parameter is represented by a subjective probability distribution. At the time when the dominant player is designing the supply or purchase contract, should the dominated player help the dominant player to improve his imperfect system-parameter knowledge? Can the dominant player induce the dominated player to share her superior knowledge by using (or by threatening to use) sophisticated “channel-coordinating” contract formats? It is likely that one would surmise from the literature that the answer to both questions is “yes”. However, this chapter shows that very often the correct answer is “no”. Specifically, for the basic cost and market parameters, we show that the dominated player is (1) always motivated to mislead the dominant player to have a biased mean value for his subjective distribution; and (2) motivated, over a wide range of likely conditions, to increase the variance of the dominant player’s subjective distribution. Moreover, the dominant player cannot narrow this range of confusion-encouraging conditions by using a more sophisticated contract format such as a “menu of contracts.” Our results highlight the need to develop arrangements that can actually motivate a dominated player to share knowledge honestly.-
dc.languageengen_US
dc.publisherSpringer-
dc.relation.ispartofSupply chain coordination under uncertaintyen_US
dc.titleShould a Stackelberg-dominated supply-chain player help her dominant opponent to obtain better system-parameter knowledge?en_US
dc.typeBook_Chapteren_US
dc.identifier.emailLau, AH: ahlau@business.hku.hken_US
dc.identifier.emailLau, HS: mshslau@hku.hken_US
dc.identifier.authorityLau, AH=rp01072en_US
dc.identifier.doi10.1007/978-3-642-19257-9_15-
dc.identifier.hkuros210014en_US
dc.identifier.spage379en_US
dc.identifier.epage401en_US
dc.publisher.placeBerlin-
dc.customcontrol.immutableyiu 130927-

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