FORMATION OF SUPPLY CHAIN CONTRACT: THEORY AND EXPERIMENT

Abstract

In recent years, the globalization in business has transformed the traditional linear supply chain into a complex network of interactions among supply chain participants across different tiers. In such a supply chain system, firms are facing the challenges of making better operational decisions on strategic sourcing and collaborative/competitive negotiations. My dissertation explores the formation of supply chain contract under competitive scenarios in complex supply chain networks from both theoretical and behavioral perspectives. Specifically, Essay 1 examines the implications of asymmetric bilateral relations for supply contract negotiations under retail competition and highlights the intuition that a firm should not only focus on the best terms of trade from potential partners but also consider competitive consequences of partner choice. Essay 2 theoretically and behaviorally investigates contract bargaining in two-sided supply chain networks with multiple retailers/suppliers on each side and develops a new behavioral theory to explain and predict the contract bargaining behaviors. Essay 3 theoretically and behaviorally studies the contract auction mechanism design from supplier's perspective in decentralized supply chain structures with one supplier and multiple potential retailers and finds that contract auction behaviors have substantial impact on subsequent market decisions.