Essays on incentives in decentralized supply chains

In recent years, incentive issues in supply chain management have became very important with the development of information technology such as Internet and RFID. And there has been an increased interest in research on how to coordinate the firms with different incentives along the decentralized supply chain. Following this line, the three essays of the dissertation comprise an analysis of incentive issues in decentralized supply chains with multiple decision makers both at the firm level and at the individual level.; In the first essay, we study capacity, demand allocation and pricing incentive issues in a decentralized multi-product assembly system. The basic questions the essay addresses is as follows: What's the impact of decentralized incentives on assembly system performance. The essay identifies and explores various types of inefficiencies arising from decentralization. Especially, we find that capacity imbalance of the common component is less frequent under decentralized decision making. Also, the apparent flexibility of a common component may actually hurt performance in a decentralized system whereas it can only help in a centralized system.; The second essay models the behavior of agents under different compensation scenarios in a serial supply chain consisting of a supplier and a retailer. Under the context, of a buy-back contract, three variations of this supply chain structure are studied. The derived quantitative and analytic results show that agents tend to deviate from their principles' best interests. Indeed, under certain circumstances, there is an incentive to cheat systematically. These findings may partly explain the stories behind celebrated accounting fraud cases.; In the third essay, we model the phenomenon of cost information distortion in a three-tier supply chain under three outsourcing structures currently implemented by top-tier OEMs. The OEM is a Stackelberg leader who decides how much the end product to produce. All contracting parties use a take-it-or-leave-it wholesale-price contract. Both the CM and the supplier have private information about their own production costs. The OEM has prior information about these costs, but the prior depends on the specific outsourcing structure and the information may be distorted. We characterize each party's optimal decision and the intermediary party's information distortion behavior.