Fast Delivery: B2B Field Experiments Amid COVID-19 Outbreak and New Normal

Abstract

Procuring essential products during disasters can save lives and livelihoods; nevertheless, limited research has explored this critical issue. In this paper, we collaborate with a buying company to run a unique B2B field experiment during the early COVID-19 outbreak that prompts an urgent need for personal protective equipment. We find that suppliers would deliver products faster by quoting a significantly shorter lead time when the buying company purchases products for donation rather than for resale. Similarly, suppliers quote a shorter lead time when the company provides crisis information---the number of COVID-19 cases in the region with high crisis levels---to highlight the urgent need for products. Interestingly, faster delivery does not come at the expense of the buying company: Buyers receive the products faster but also pay less. We collaborate with the same company to rerun the field experiment in the new normal, and find that the buyer's intent of donation leads to shorter lead time but not to lower wholesale price. Moreover, providing the COVID-19 information of the local community to suppliers has no impact on their decisions. Overall, our paper provides the first empirical evidence on suppliers' lead time and wholesale price decisions during and after a disaster, thereby helping companies to deliver emergency products in a timely and efficient manner, as well as designing their philanthropic and information strategies.

Keywords: philanthropic activity, field experiment, lead time, wholesale pricing, crisis information