scholarly journals Naked Exclusion in the Lab: The Case of Sequential Contracting

2014 ◽  
Vol 62 (1) ◽  
pp. 137-166 ◽  
Author(s):  
Jan Boone ◽  
Wieland Müller ◽  
Sigrid Suetens
Keyword(s):  
Sequential Contracting

Multistability for Delayed Neural Networks via Sequential Contracting

2015 ◽  
Vol 26 (12) ◽  
pp. 3109-3122 ◽  
Author(s):  
Chang-Yuan Cheng ◽  
Kuang-Hui Lin ◽  
Chih-Wen Shih ◽  
Jui-Pin Tseng
Keyword(s):  
Neural Networks ◽  
Delayed Neural Networks ◽  
Sequential Contracting

Store-Brand Introduction and Multilateral Contracting

2021 ◽  
Author(s):  
Quan Zheng ◽  
Hongseok Jang ◽  
Xiajun Amy Pan
Keyword(s):  
Information Leakage ◽  
Problem Definition ◽  
Alcoholic Beverages ◽  
Noncooperative Game ◽  
Store Brand ◽  
Information Structures ◽  
National Brand ◽  
Market Shares ◽  
Boundary Equilibrium ◽  
Sequential Contracting

Problem definition: We explore the impacts of store-brand (SB) introduction on multilateral contracting in vertical supply relationships that involve two upstream national-brand manufacturers (NBMs) selling through a common retailer. Two different information structures are scrutinized: simultaneous (secret offers) versus sequential contracting (public offers), essentially different timing by which the NBMs contract with the retailer. Academic/practical relevance: SB products are prevalent nowadays; however, the market shares in different categories vary substantially, from negligible sales (e.g., alcoholic beverages) to more than half of the total sales (e.g., milk). As retailers encroach on the NBMs’ product market, their relationships are reshaped accordingly. Thus, investigating whether SB introduction would overturn the conventional wisdom about multilateral contracting is pertinent. Methodology: The methodology is noncooperative game theory. Results: We identify a boundary equilibrium where the sale of the SB is negligible, but its presence enables the retailer to intensify the upstream competition and elicits better wholesale contracts. We show that this equilibrium tends to occur in a wider region under sequential contracting than under simultaneous contracting. In the boundary equilibrium of sequential contracting, the NBM could entail a first-mover advantage, a stark contrast to the second-mover advantage in the nonboundary equilibrium. Further, as opposed to the uniqueness of sequential contracting, we characterize a continuum of boundary equilibria under simultaneous contracting such that symmetric NBMs may even set asymmetric wholesale prices so as to drive the SB out of the market. Managerial implications: We provide a rationale for the observed negligible sales of certain SBs and further shed light on the choice between public and secret offers. Public offers could perform better for the retailer who, in turn, benefits from information leakage. With public offers, the NBMs’ preference for the leadership could also be reversed for SBs with negligible sales. Because of the intricate impact of SBs on contracting sequence, these two instruments should be jointly analyzed.

scholarly journals Sequential contracting with multiple principals

2009 ◽  
Vol 144 (2) ◽  
pp. 503-531 ◽  
Author(s):  
Alessandro Pavan ◽  
Giacomo Calzolari
Keyword(s):  
Multiple Principals ◽  
Sequential Contracting

On the Role of Menus in Sequential Contracting: A Multiple Lending Example

2017 ◽  
Author(s):  
Andrea Attar ◽  
Catherine Casamatta ◽  
Arnold Chassagnon ◽  
Jean P Dechamps
Keyword(s):  
Sequential Contracting

scholarly journals On the optimality of privacy in sequential contracting

2006 ◽  
Vol 130 (1) ◽  
pp. 168-204 ◽  
Author(s):  
Giacomo Calzolari ◽  
Alessandro Pavan
Keyword(s):  
Sequential Contracting

Procurement for Assembly Under Asymmetric Information: Theory and Evidence

2021 ◽  
Author(s):  
Andrew M. Davis ◽  
Bin Hu ◽  
Kyle Hyndman ◽  
Anyan Qi
Keyword(s):  
Supply Chain ◽  
Mechanism Design ◽  
Operations Management ◽  
Bargaining Power ◽  
Human Subjects ◽  
Cost Information ◽  
Supply Chain Efficiency ◽  
Private Cost ◽  
Dynamic Bargaining ◽  
Sequential Contracting

We study an original equipment manufacturer (OEM) purchasing two inputs for assembly from two suppliers with private cost information. The OEM can contract with the two suppliers either simultaneously or sequentially. We consider both cases in which the OEM has relatively equal bargaining power (the dynamic bargaining institution) or substantial bargaining power (the mechanism design institution). For the dynamic bargaining institution, we show that in sequential bargaining, the supply chain profit is higher, the OEM earns a lower profit, the first supplier earns a higher profit, and the second supplier may earn a higher or lower profit, than compared with simultaneous bargaining. For the mechanism design institution, we show that all players’ profits are the same in simultaneous and sequential contracting. We also benchmark against a case where the OEM procures both inputs from a single integrated supplier (a dyadic supply chain). We then test these predictions in a human-subjects experiment, which supports many of the normative predictions qualitatively with some deviations: an OEM with relatively equal bargaining power weakly prefers to contract with suppliers simultaneously, whereas an OEM with substantial bargaining power prefers to contract with suppliers sequentially. In addition, the OEM’s profit and supply chain efficiency are higher in the dyadic supply chain than the assembly system. This paper was accepted by Charles Corbett, operations management.

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