Supply Chain Bargaining Theory

22 Pages Posted: 21 Jun 2013 Last revised: 26 Jun 2013

See all articles by P. Kenney

P. Kenney

Desautels Faculty of Management

Date Written: June 21, 2013


The consensus among academic researchers is that supply chain management lacks grounding theory specific to its field and arguably enough to be recognized as an academic discipline. This paper uses game theoretic, asymmetric Nash bargaining to develop a new theory specific to operations and supply chain management. Supply chain bargaining theory connects supply chain management practices to a firm’s financial performance. The theory quantifies a relationship explaining that a firm increases profit by improving its competitive advantage among its competitors and bargaining power with its customers. The concept of competitive advantage links to existing literature that focuses on a firm’s internal capabilities and those provided by their upstream supply chain. Bargaining power provides a conceptual connection to a firm’s downstream customer management practices. The concepts and relationships of this new theory align with existing conceptual and empirical supply chain management and operations research. Supply chain bargaining theory clarifies the binding mechanism between dyad members of supply chains which can facilitate future research into supply networks.

Keywords: Theory, Supply chain management, Bargaining power, Competitive advantage

JEL Classification: C78, D20, L21

Suggested Citation

Kenney, Jud, Supply Chain Bargaining Theory (June 21, 2013). Available at SSRN: or

Jud Kenney (Contact Author)

Desautels Faculty of Management ( email )

1001 Sherbrooke St. W
Montreal, Quebec H3A 1G5

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics