Özer, Özalp; Zheng, Yanchong; Chen, Kay-Yut - In: Management Science 57 (2011) 6, pp. 1111-1137
This paper investigates the capacity investment decision of a supplier who solicits private forecast information from a manufacturer. To ensure abundant supply, the manufacturer has an incentive to inflate her forecast in a costless, nonbinding, and nonverifiable type of communication known as...