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Social Preferences and Supply Chain Performance: An Experimental Study

Social Preferences and Supply Chain Performance: An Experimental Study,10.1287/mnsc.1080.0910,Management Science,Christoph H. Loch,Yaozhong Wu

Social Preferences and Supply Chain Performance: An Experimental Study   (Citations: 11)
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Supply chain contracting literature traditionally has focused on aligning incentives for economi- cally rational players. Recent work has hypothesized that social preferences, separate from eco- nomic incentives, may influence behavior in supply chain transactions. Social preferences refer to intrinsic concerns for the other party's welfare in the case of a positive relationship and intrin- sic desires for a higher relative payoff compared with the other party's when status is salient. This article provides experimental evidence that social preferences systematically affect econom- ic decision making in supply chain transactions. Specifically, supply chain parties deviate from the predictions provided by self-interested profit-maximization models, such that relationship pre- ference promotes cooperation, individual performance, and high system efficiency, sustainable over time, whereas status preference induces tough actions and reduces both system efficiency and individual performance.
Journal: Management Science - Management , vol. 54, no. 11, pp. 1835-1849, 2008
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