TY - JOUR
T1 - The effect of information on supply chain coordination
T2 - A model of value discounting
AU - Lam, Manh Ha
AU - Chang, Wei Shiun
N1 - Publisher Copyright:
© 2019 College of Management, National Cheng Kung University
PY - 2020/9
Y1 - 2020/9
N2 - 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.
AB - 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.
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U2 - 10.1016/j.apmrv.2019.06.003
DO - 10.1016/j.apmrv.2019.06.003
M3 - Article
AN - SCOPUS:85068893485
SN - 1029-3132
VL - 25
SP - 134
EP - 141
JO - Asia Pacific Management Review
JF - Asia Pacific Management Review
IS - 3
ER -