Collaboration in decentralized supply chains

This dissertation studies collaboration in decentralized supply chains. The four main chapters examine sharing information to mitigate price and production distortion and introducing new products through a successful collaboration between an original equipment manufacturer (OEM) and a component supplier (CS).;In Chapter 2 we explore how sharing information generates a system-wide price equilibrium which minimizes price and production distortion. While the CS can withhold private information to her advantage, the OEM can respond by initiating his own sharing, at some cost, to produce the same price and production decisions. We quantify the benefit of information sharing to the OEM and illustrate cases where the CS prefers sharing credible information among competing suppliers.;Chapters 3 and 4 examine the collaborative role of the OEM and CS to introduce a new product to the OEM's potential customers. Since the customers exhibit their preference for higher-performance in their willingness to pay prices associated with product performance, the OEM uses a cost sharing contract to help align the CS's interests with his own market preferences. In Chapter 3 we examine the OEM's price discrimination policy and his ability to customize products; in Chapter 4 the OEM foregoes price discrimination by choosing his own prices for two product versions and by establishing a performance level constraint which he imposes on the suppliers. We find the system achieves a subgame-perfect Nash equilibrium in each chapters' setting. While the CS enjoys her role as an exclusive supplier and positions herself for impending competition, we find that the OEM's profits increase as he exerts additional influence over suppliers within the market.;In Chapter 5 the CS develops a new component but faces limited production capacity. The CS can license her proprietary technology to a lower-cost supplier (CS2) in exchange for a per-unit license fee. As the CS's production capacity increases, she poses a credible threat to CS2 and forces her to lower price in the price competition. If CS2 lowers her price, both the OEM and CS benefit from the additional resulting sales. We also determine the CS's myopic performance level decision lowers system-wide profits.