The experimental investigation of the profit distribution in industrial supply chains with an outside option

Abstract

There is an industrial supply chain, where an individual customer selects a supplier and excludes other ones. If the excluded supplier has the possibility to overtake the relationship afterwards, he has big influence on the relationship among the cooperation partners. A profit distribution rule has been developed that considers the impact of the excluded supplier. The paper presents round based games in which the present values change and influence the cooperative relationships. First, examples with ideal-typical numbers are calculated and depicted by the software "MATLAB". Internet experiments are made with participants on the basis of the software "z-tree" in order prove the relevance of the proposed profit distribution rule. Finally, the experimental data is compared with the theoretical predictions.