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informs MANAGEMENT SCIENCE Vol. 54, No. 11, November 2008, pp. iv–vi doi10.1287/mnsc.1080.0957 issn0025-1909 eissn1526-5501 08 5411 00iv ©2008 INFORMS Social Preferences and Supply Chain Performance: the subsidiary’s desire to encroach in the retail mar- An Experimental Study ket. Recognizing that they can still sustain retail prof- Christoph H. Loch, Yaozhong Wu its, traditional retailers are then willing to pay more to the manufacturer in the wholesale arena. This sug- People’s actions in the economic transactions are gests that a delegated subsidiary structure may be determined not only by incentives; incentives alone even more desirable in the increasingly common envi- may cause people to be calculating rather than ori- ronment in which manufacturers use multiple chan- ented toward a win-win. Behavior is also influenced nels to reach retail customers. emotionally by social preferences. In particular, peo- ple care about status (“how much do I have relative Market-Based Supply Chain Coordination by to you?”) and reciprocity (“if you were nice to me, Matching Suppliers’ Cost Structures with Buyers’ I want to reciprocate; if you were not nice, I want Order Profiles to retaliate”). In this paper, we report results from Yu Xia, Bintong Chen, Panos Kouvelis an experiment in which
Management Science – INFORMS
Published: Nov 1, 2008
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