Various contracts can be designed to coordinate a simple supplier–retailer channel, yet the contracts proposed in prior research and tested in a laboratory setting do not perform as standard theory predicts. The supplier, endowed with all bargaining power, can neither fully coordinate the...

Supply chains today routinely use third parties for many strategic activities, such as manufacturing, R&D, or software development. These activities often include relationship-specific investment on the part of the vendor, while final outcomes can be uncertain. Therefore, writing complete...

One of the main assumptions in research on designing supply contracts is that decision makers act in a way that maximizes their expected profit. A number of laboratory experiments demonstrated that this assumption does not hold – specifically, faced with uncertain demand, decision-makers place...

Problem definition: To improve the poor performance of supply chains caused by misaligned incentives under the wholesale price contract, theory proposes coordinating contracts. However, a common finding of experimental studies testing such contracts is that they tend to yield only a marginal, if...

One of the goals of procurement is to establish a fair price while affording the buyer some flexibility in selecting the suppliers to deal with. Reverse auctions do not have this flexibility, because it is the auction rules and not the buyer that determine the winner. But an important advantage...