The effect of information on supply chain coordination: A model of value discounting

Manh Ha Lam, Wei Shiun Chang

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)

Abstract

Recent studies have found that decision makers do not perform as expected when they receive much, and frequent, information, that is, retailers order less than the optimal order quantity, assuming rationality, when they get frequent sale feedback. Loss aversion is one of the theories used to explain such behavioral phenomenon. However, the loss aversion model cannot explain why there is a gap between the ordering behaviors in retailing context with buyback and revenue sharing contracts. We propose an alternative model of value discounting to account for such a gap and explain why there is an information effect on the ordering behaviors. We test the theory with an experiment and find that the retailers’ behaviors when facing two contracts and two information schemes match with the predictions of value discounting theory.

Original languageEnglish
Pages (from-to)134-141
Number of pages8
JournalAsia Pacific Management Review
Volume25
Issue number3
DOIs
Publication statusPublished - 2020 Sep

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Strategy and Management

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