Strategic Supply Chain Contracting to Stimulate Downstream Process Innovation

摘要: In a supply chain, investments that rm makes in reducing its own variable costs provide an obvious bene t to suppliers: All else being equal, lower marginal cause the increase output, hence increasing consumption of suppliers' outputs. Without pre-commitment wholesale prices from supplier(s), will tend underinvest cost reduction because fear held-up. Clearly, supplier such can eliminate this hold-up problem by pre-committing, instead remaining °exible with respect price. However, making advance commitment price, it gives up important means responding demand uncertainty. paper we examine trade-o® is faced when downstream channel partner has opportunities invest relationship speci c reductions. Should commit price order encourage investment reduction, or should remain respond We discuss several simple pricing mechanisms trade-o®. (Channel Coordination, Channels Distribution, Industrial Organization, Cost Reducing R&D) ¤(Corresponding Author)The University Texas at Austin, Management Department, CBA 4.202, TX 78712, steve.gilbert@bus.utexas.edu yCase Western Reserve University, Department OR and OM, 10900 Euclid Ave., Cleveland, OH 44106 vxc10@po.cwru.edu.