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The Impact of Decision Rights on Innovation Sharing

dc.contributor.authorAhn, Hyun-Soo
dc.contributor.authorLeider, Stephen
dc.contributorBeer, Ruth
dc.date.accessioned2017-05-12T18:32:41Z
dc.date.available2017-05-12T18:32:41Z
dc.date.issued2018-12
dc.identifier1369en_US
dc.identifier.urihttps://hdl.handle.net/2027.42/136770
dc.description.abstractWhile innovation sharing between a supplier and a buyer—a common practice in the automotive industry—can increase the efficiency of a supply chain, many suppliers are reluctant to do so. Sharing innovations leaves the supplier in a vulnerable position if the buyer exploits the information and re-shares the supplier’s innovation with competing suppliers. Anecdotal evidence from automotive suppliers tells that in some occasions the buyer’s decision is in the hands of a long-run focused employee (“engineer”), while in other occasions it is a short-run focused employee (“procurement manager”) who has more control. To examine how the allocation of decision rights to employees with different time horizons affects collaboration between the two firms, we model a buyer-supplier relationship where the buyer is a dual decision maker, consisting of long-run and short-run focused employees. We characterize the equilibrium of this model and show that the frequency of collaborative outcomes increases from a case where the decision is made by an employee with a short-term objective, to a case where the decision is made jointly, to a case where a decision is made by an employee with a long-run objective. Our experimental results verify this prediction, for the most part. An important result not predicted by the theory is that in the joint control case, both employees become significantly less trustworthy. With an additional treatment which allows for free-form communication, we identify social interaction effects in the form of a “bias to agreement” as a plausible driver of the moreen_US
dc.subjectbehavioral operationsen_US
dc.subjectinnovation sharingen_US
dc.subjecttrust and trustworthinessen_US
dc.subjectcollaboration in supply chainsen_US
dc.subject.classificationOperations and Management Scienceen_US
dc.titleThe Impact of Decision Rights on Innovation Sharingen_US
dc.typeWorking Paperen_US
dc.subject.hlbtoplevelBusiness
dc.contributor.affiliationumRoss School of Businessen_US
dc.contributor.affiliationotherKelley School of Business - Indiana Universityen_US
dc.contributor.affiliationumcampusAnn Arbor
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/136770/1/1369_Beer.pdf
dc.description.bitstreamurlhttps://deepblue.lib.umich.edu/bitstream/2027.42/136770/4/1369_Beer_Dec2018.pdf
dc.description.filedescriptionDescription of 1369_Beer_Dec2018.pdf : December 2018 revision
dc.owningcollnameBusiness, Stephen M. Ross School of - Working Papers Series


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