A Model Of Information And I.T. Adoption In Food Supply Chains
Evidence from the Food Supply chain suggests that food retailers often exhibit a reluctance to share information with their suppliers even when this benefits both parties. For example, inventory coordination and reduced costs may be realized by adopting appropriate supply chain management technologies such as cooperative planning, forecasting, and replenishment. This behavior is explained by viewing information as a strategic asset and modeling information exchange and the corresponding adoption of information technologies and analysis as a strategic game, i.e., an economic model where food retailers and their suppliers operate with uncertainty. The game is based on stylized facts from the food industry. Some key results from the game model are: (a) under certain conditions retailers may withhold valuable sales data from suppliers, even if the benefits from supply coordination are reduced; (b) there exists a revealed (inferred) equilibrium signal (i.e., suppliers know what orders will be) even when sales data are withheld from suppliers; and (c) unanticipated economic slow-downs cause overstocking which harm smaller firms more than larger ones, driving a wedge between them. This is an attempt to build economic (game-theoretic) models that incorporate the realities of the food supply/demand chain and then to see what behavior the models predict. Such models have been widely used to explain economic behavior and exchange at the agricultural end of the food supply chain and for international trade behavior. This is one of the first applications to the retail/wholesale/manufacture levels in the food delivery chain.
|Date of creation:||2002|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://foodindustrycenter.umn.edu/
More information through EDIRC
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.:
- Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring.
- Nicholas Economides, 1995.
"The Economics of Networks,"
94-24, New York University, Leonard N. Stern School of Business, Department of Economics, revised Sep 1995.
- Economides, Nicholas, 1996. "The economics of networks," International Journal of Industrial Organization, Elsevier, vol. 14(6), pages 673-699, October.
- Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
- Jean Kinsey, 2000. "A Faster, Leaner, Supply Chain: New Uses of Information Technology," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(5), pages 1123-1129.
- S. Baranzoni & P. Bianchi & L. Lambertini, 2000. "Market Structure," Working Papers 368, Dipartimento Scienze Economiche, Universita' di Bologna.
When requesting a correction, please mention this item's handle: RePEc:ags:umrfwp:14299. 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: (AgEcon Search)
If references are entirely missing, you can add them using this form.