Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/230110
Authors: 
Johnsen, Lennart C.
Voigt, Guido
Weimann, Joachim
Year of Publication: 
2019
Citation: 
[Journal:] Production and Operations Management [ISSN:] 1937-5956 [Volume:] 29 [Issue:] 3 [Pages:] 705-724
Abstract: 
Using laboratory experiments, we study how communication media affect cooperation in a supply chain when the buyer has private information about the end‐customer demand. We show that coordinating contracts (quantity discount) combined with efficient means to electronically share private information (one‐way, pre‐defined text message) result in almost efficient outcomes, but only if verbal communication takes place before the actual contracting stage. Content analysis shows that verbal communication is especially effective in establishing trust and trustworthiness when players talk about reciprocal strategies and it is more so when the buyer clearly expresses guilt from lying. Furthermore, the clarification of the mutual benefits of information sharing moves the buyer to truthfulness. Finally, we show that our results are not due to a reputation building mechanism of repeated interaction.
Subjects: 
asymmetric information
cheap talk
trust
trustworthiness
behavioral operations management
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by-nc-nd/4.0/
Document Type: 
Article
Document Version: 
Published Version

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