Coordinating Contracts for Decentralized Supply Chains with Retailer Promotional Effort
Why this work is in the frame
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Bibliographic record
Abstract
In this paper, a risk-neutral manufacturer sells a single product to a risk-neutral retailer. The retailer chooses inventories ex ante and promotional effort ex post. If the wholesale price exceeds marginal production cost, the retailer orders fewer than the joint profit-maximizing inventories. If the manufacturer attempts to coordinate inventories by buying back unsold units, then the retailer's promotional incentives are dulled. Under very general assumptions on the form of the effort function, we show that buy-backs adversely affect supply chain profits, and higher buy-back prices imply lower profits. Also, while a buy-back alone cannot coordinate the channel, coupling buy-backs with promotional cost-sharing agreements (if effort cost is observable), offering unilateral markdown allowances ex post (if demand is observable but not verifiable), or placing additional constraints on the buy-back (if demand is observable and verifiable) does result in coordination. This problem is not limited to returns policies but is shown to hold for a much larger set of contracts. The results are quite robust (e.g., when the retailer chooses effort before observing demand), but coordinating contracts become more problematic if, for example, the retailer also stocks substitutes for the manufacturer's product. Other model extensions are also discussed.
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.001 | 0.000 |
| Scholarly communication | 0.001 | 0.002 |
| Open science | 0.001 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it