Paper Info
Title
The Relational Advantages of Intermediation
Abstract
This paper provides a novel explanation for the use of supply chain intermediaries. We find that even in the absence of the well-known transactional and informational advantages of mediation, intermediaries improve supply chain performance. In particular, intermediaries facilitate responsive adaptation of the buyers' supplier base to their changing needs while simultaneously ensuring that suppliers behave as if they had long-term sourcing commitments from buying firms. In the face of changing buyer needs, an intermediary that sources on behalf of multiple buyers can responsively change the composition of future business committed to a supplier such that a sufficient level of business comes from the buyer(s) that most prefer this supplier. On the other hand, direct buyers that source only for themselves must provide all their committed business to a supplier from their own sourcing needs, even if they no longer prefer this supplier. Unlike existing theories of intermediation, our theory better explains the observed phenomenon that although transactional barriers and information asymmetries have steadily decreased, the use of intermediaries has soared, even among large companies such as Walmart. This paper was accepted by Martin Lariviere, operations management.
Year
DOI
Venue
2012
10.1287/mnsc.1110.1512
Management Science
Keywords
Field
DocType
transactional barrier,well-known transactional,supplier base,supply chain intermediary,supply chain performance,multiple buyer,buyer need,committed business,relational advantages,direct buyer,future business,intermediaries,repeated games
Intermediary,Economics,Information asymmetry,Microeconomics,Commerce,Repeated game,Mediation (Marxist theory and media studies),Supply chain,Intermediation,Phenomenon,Transactional leadership
Journal
Volume
Issue
ISSN
58
9
0025-1909
Citations 
PageRank 
References 
11
0.69
15
Authors
2
Name
Order
Citations
PageRank
Elena Belavina1121.71
Karan Girotra215014.99