Credible Information Sharing in Supply Chains - A Behavioral Assessment of Review Strategies

Neumann, Thomas
Schosser, Stephan
Vogt, Bodo
Voigt, Guido
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In laboratory experiments, we compare the ability of trigger strategies with that of (relatively complex) review strategies to coordinate capacity decisions in supply chains when demand forecasts are based on private information. While trigger strategies punish apparently uncooperative behavior (misstated demand forecasts) immediately, review strategies only punish when apparently misstated information culminates over several periods. We contribute to the existing literature on capacity coordination in supply chains by showing that repeated game strategies lead to a significant degree of forecast misrepresentation, although they theoretically support the truth-telling equilibrium. However, forecast misrepresentation is more pronounced in review strategies. This behavioral effect is diametrically opposed to the theoretically predicted benefit of review strategies.
Intelligent Decision Support and Big Data for Logistics and Supply Chain Management, Decision Analytics, Mobile Services, and Service Science, Repeated Game Strategies, Capacity Game, Behavioral Operations Management
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