Journal article
Why do suppliers choose wholesale price contracts? End-of-season payments disincentivize retailer marketing effort
Journal of the Academy of Marketing Science, v 46(2), pp 212-233
01 Mar 2018
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
Although theoretical work has shown that end-of-season payment contracts, which allow suppliers and retailers to share the cost of unsold inventory, increase total profit, most suppliers and retailers today still use simple wholesale price contracts. In a series of experimental studies, we show that supplier preferences for wholesale price contracts can be explained by their concern that end-of-season payments contracts will disincentivize retailer marketing effort. Moreover, suppliers' pessimistic predictions regarding reduced retailer effort are confirmed by retailers' reduced investment in marketing effort in our experiments. Our results suggest that for suppliers and retailers to benefit from end-of-season payments contracts, retailers should publicize their demand-enhancing marketing practices.
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Details
- Title
- Why do suppliers choose wholesale price contracts? End-of-season payments disincentivize retailer marketing effort
- Creators
- Anna G. Devlin - University of Alabama in HuntsvilleWedad Elmaghraby - University of Maryland, College ParkRebecca W. Hamilton - Georgetown University
- Publication Details
- Journal of the Academy of Marketing Science, v 46(2), pp 212-233
- Publisher
- Springer Nature
- Number of pages
- 22
- Grant note
- National Science Foundation; National Science Foundation (NSF)
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Decision Sciences (and Management Information Systems)
- Web of Science ID
- WOS:000424674300004
- Scopus ID
- 2-s2.0-85021729363
- Other Identifier
- 991021862287004721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business