It is generally in its supply chain partners' interest for a downstream firm to invest in innovations. However, in response to the downstream firm innovation, the upstream suppliers may have an incentive to opportunistically increase their wholesale prices. The hold-up problem these opportunistic behaviors create leads to the downstream firm to underinvest in innovation. Clearly, this hold-up problem could be eliminated by a pre-commitment to price. However, by making an advance commitment to price, a downstream supplier sacrifices an important means of responding to demand uncertainty. In this paper we research on the trade-off: should it commit to a price in order to encourage innovation, or should it remain flexible in order to respond to demand uncertainty.


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    Titel :

    Strategic Commitment to Price to Stimulate Downstream Innovation under Supplier Competition


    Beteiligte:
    Sun, Guo-yan (Autor:in) / Guo, Yao-huang (Autor:in)

    Kongress:

    First International Conference on Transportation Engineering ; 2007 ; Southwest Jiaotong University, Chengdu, China



    Erscheinungsdatum :

    2007-07-09




    Medientyp :

    Aufsatz (Konferenz)


    Format :

    Elektronische Ressource


    Sprache :

    Englisch




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