Reverse bullwhip effect in pricing
Price variability is one of the major causes of the bullwhip effect. This paper analyzes the impact of procurement price variability in the upstream of a supply chain on the downstream retail prices. Procurement prices may fluctuate over time, for example, when the supply chain players deploy auction type procurement mechanisms, or if the prices are dictated in market exchanges. A game theory framework is used here to model a serial supply chain. Sequential price game scenarios are investigated to show that there is an increase in retail price variability and an amplified reverse bullwhip effect on prices (RBP) under certain demand conditions.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Rajiv Lal, 1990. "Improving Channel Coordination Through Franchising," Marketing Science, INFORMS, vol. 9(4), pages 299-318.
- Rajeev K. Tyagi, 1999. "On the Effects of Downstream Entry," Management Science, INFORMS, vol. 45(1), pages 59-73, January.
- Abel P. Jeuland & Steven M. Shugan, 1983. "Managing Channel Profits," Marketing Science, INFORMS, vol. 2(3), pages 239-272.
- Rabah Amir & Val E. Lambson, 2000.
"On the Effects of Entry in Cournot Markets,"
Review of Economic Studies,
Oxford University Press, vol. 67(2), pages 235-254.
- Rabah Amir & Val E. Lambson, 1998. "On the Effects of Entry in Cournot Markets," CIE Discussion Papers 1998-06, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
- AMIR, Rabah & LAMBSON, Val, 1999. "On the effects of entry in Cournot markets," CORE Discussion Papers 1999059, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Rabah Amir, 2000. "On the Effects of Entry in Cournot Markets," Econometric Society World Congress 2000 Contributed Papers 1475, Econometric Society.
- Drew Fudenberg & Jean Tirole, 1991. "Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262061414, December.
- Charles A. Ingene & Mark E. Parry, 1995. "Channel Coordination When Retailers Compete," Marketing Science, INFORMS, vol. 14(4), pages 360-377.
- Ganesh Iyer, 1998. "Coordinating Channels Under Price and Nonprice Competition," Marketing Science, INFORMS, vol. 17(4), pages 338-355.
- Hau L. Lee & V. Padmanabhan & Seungjin Whang, 1997. "Information Distortion in a Supply Chain: The Bullwhip Effect," Management Science, INFORMS, vol. 43(4), pages 546-558, April.
- Wei-yu Kevin Chiang & Dilip Chhajed & James D. Hess, 2003. "Direct Marketing, Indirect Profits: A Strategic Analysis of Dual-Channel Supply-Chain Design," Management Science, INFORMS, vol. 49(1), pages 1-20, January.
- David Besanko & Sachin Gupta & Dipak Jain, 1998. "Logit Demand Estimation Under Competitive Pricing Behavior: An Equilibrium Framework," Management Science, INFORMS, vol. 44(11-Part-1), pages 1533-1547, November.
- Xavier Drèze & David R. Bell, 2003. "Creating Win–Win Trade Promotions: Theory and Empirical Analysis of Scan-Back Trade Deals," Marketing Science, INFORMS, vol. 22(1), pages 16-39, November.
- Eitan Gerstner & James D. Hess, 1995. "Pull Promotions and Channel Coordination," Marketing Science, INFORMS, vol. 14(1), pages 43-60.
- Simon GB Cowan & Simon Cowan, 2004. "Demand shifts and imperfect competition," Economics Series Working Papers 188, University of Oxford, Department of Economics.
- Brad Barham & Roger Ware, 1993.
"A Sequential Entry Model with Strategic Use of Excess Capacity,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 26(2), pages 286-98, May.
- Brad Barham & Roger Ware, 1991. "A Sequential Entry Model with Strategic Use of Excess Capacity," Working Papers 835, Queen's University, Department of Economics.
- Kim, Jeon G. & Chatfield, Dean & Harrison, Terry P. & Hayya, Jack C., 2006. "Quantifying the bullwhip effect in a supply chain with stochastic lead time," European Journal of Operational Research, Elsevier, vol. 173(2), pages 617-636, September.
- Charles J. Corbett & Uday S. Karmarkar, 2001. "Competition and Structure in Serial Supply Chains with Deterministic Demand," Management Science, INFORMS, vol. 47(7), pages 966-978, July.
- Disney, S.M. & Farasyn, I. & Lambrecht, M. & Towill, D.R. & de Velde, W. Van, 2006. "Taming the bullwhip effect whilst watching customer service in a single supply chain echelon," European Journal of Operational Research, Elsevier, vol. 173(1), pages 151-172, August.
- Disney, S. M. & Towill, D. R., 2003. "The effect of vendor managed inventory (VMI) dynamics on the Bullwhip Effect in supply chains," International Journal of Production Economics, Elsevier, vol. 85(2), pages 199-215, August.
- Hau L. Lee & V. Padmanabhan & Seungjin Whang, 2004. "Comments on "Information Distortion in a Supply Chain: The Bullwhip Effect"," Management Science, INFORMS, vol. 50(12_supple), pages 1887-1893, December.
- Sheu, Jiuh-Biing, 2005. "A multi-layer demand-responsive logistics control methodology for alleviating the bullwhip effect of supply chains," European Journal of Operational Research, Elsevier, vol. 161(3), pages 797-811, March.
- Frank Chen & Zvi Drezner & Jennifer K. Ryan & David Simchi-Levi, 2000. "Quantifying the Bullwhip Effect in a Simple Supply Chain: The Impact of Forecasting, Lead Times, and Information," Management Science, INFORMS, vol. 46(3), pages 436-443, March.
When requesting a correction, please mention this item's handle: RePEc:eee:ejores:v:192:y:2009:i:1:p:302-312. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.