© Springer International Publishing AG 2018. We examine the incentives for a firm to provide non-truthful demand information under a two-company shipping collaboration. We analyze how distorted demand reporting impacts the logistics costs of each individual company in the collaboration and how this impacts the stability of the collaboration agreement. We find that when the cost allocation proportions are agreed ex-ante based on the reported demand, companies have an incentive to deflate their demand when simple cost allocation rules are used; only when the Shapley value is in place, companies have no incentive to distort their demand information. When the cost allocation proportions are calculated ex-post, based on realized demand, the truth-telling strategy is dominant when the Shapley value or an allocation rule based on the demand or stand-alone costs is in place.
|Title of host publication
|International Conference on Information Systems, Logistics and Supply Chain (ILS 2016
|Subtitle of host publication
|Information Systems, Logistics, and Supply Chain
|Published - 2018
|Lecture Notes in Business Information Processing