Journal article
Partitioning cash flows to overcome retailer aversion to stocking new products
Decision sciences
29 Jan 2021
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Because decision makers tend to dislike ambiguity, the uncertainty surrounding new products can act as a barrier to retailer acceptance. We propose that by changing the structure of cash flows in the contract offered to a retailer (keeping net payments constant), a manufacturer can shift a retailer from making ambiguity-averse to ambiguity-neutral choices, thereby increasing the retailer's willingness to stock new products. In a series of studies, we demonstrate that contracts structured to provide positive cash flows after ambiguity has been resolved can increase the retailer's willingness to choose products with an unknown demand distribution. Thus, contracts with positive postdemand payments to the retailer have the potential to increase acceptance of new products.
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Details
- Title
- Partitioning cash flows to overcome retailer aversion to stocking new products
- Creators
- Anna G. Devlin - Drexel UniversityWedad J. Elmaghraby - University of Maryland, College ParkRebecca W. Hamilton - Georgetown University
- Publication Details
- Decision sciences
- Publisher
- Wiley
- Number of pages
- 20
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Decision Sciences (and Management Information Systems)
- Web of Science ID
- WOS:000612695300001
- Scopus ID
- 2-s2.0-85099814704
- Other Identifier
- 991019168164404721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Management