Addendum to “Coordination of Supply Chains with Risk-Averse Agents” by Gan, Sethi, and Yan (2004)

Gan, Xianghua; Sethi, Suresh; Yan, Houmin

Addendum to “Coordination of Supply Chains with Risk-Averse Agents” by Gan, Sethi, and Yan (2004)

Innovative Schemes for Supply Chain Coordination Under Uncertainty, T.-M. Choi and T.C. Edwin Cheng (Eds.), Springer, 2011, 3-37

5 Pages Posted: 28 Apr 2020

See all articles by Xianghua Gan

Xianghua Gan

Southwestern University of Finance and Economics (SWUFE) - School of Business Administration

Suresh Sethi

University of Texas at Dallas - Naveen Jindal School of Management

Houmin Yan

City University of Hong Kong (CityU) - Faculty of Business

Date Written: April 1, 2020

Abstract

In “Coordination of Supply Chains with Risk-Averse Agents” (POMS, Volume 13, 2004), we study the issue of coordination in supply chains involving risk-averse agents, and define a coordinating contract as one that results in a Pareto-optimal solution acceptable to each agent. We then develop coordinating contracts in various cases. In the case where the supplier and the retailer each maximizes his own expected utility, we also show that our contract yields the Nash Bargaining solution. In this addendum, we first review some related works that have appeared since the publication of the paper, and then discuss directions for future research.

Keywords: Supply Chain Management; Risk Aversion; Pareto-Optimality; Coordination; Nash Bargaining

JEL Classification: C61, M11, M20

Suggested Citation: Suggested Citation

Gan, Xianghua and Sethi, Suresh and Yan, Houmin, Addendum to “Coordination of Supply Chains with Risk-Averse Agents” by Gan, Sethi, and Yan (2004) (April 1, 2020). Innovative Schemes for Supply Chain Coordination Under Uncertainty, T.-M. Choi and T.C. Edwin Cheng (Eds.), Springer, 2011, 3-37, Available at SSRN: https://ssrn.com/abstract=3566458