United We Stand or Divided We Stand? Strategic Supplier Alliances Under Order Default Risk
研究了在订单违约风险下，上游供应商如何选择联盟规模：是加入更大的联盟以提高订单完成概率，还是留在小联盟以获得更高利润分配。分析表明，风险缓解而非竞争减少是合作的主要动机。
We study the alliance formation strategy among suppliers in a framework with one downstream firm and n upstream suppliers. Each supplier faces an exogenous random shock that may result in an order default. Each of them also has access to a recourse fund that can mitigate this risk. The suppliers can share the fund resources within an alliance, but they need to equitably allocate the profits of the alliance among the partners. In this context, suppliers need to decide whether to join larger alliances that have better chances of order fulfillment or smaller ones that may grant them higher profit allocations. We first analytically characterize the exact coalition-proof Nash-stable coalition structures that would arise for symmetric complementary or substitutable suppliers. Our analysis reveals that it is the appeal of default risk mitigation, rather than competition reduction, that motivates cooperation. In general, a riskier and/or less fragmented supply base favors larger alliances, whereas substitutable suppliers and customer demands with lower pass-through rates result in smaller ones. We then characterize the stable coalition structures for an asymmetric supplier base. We establish that grand coalition is more stable when the supplier base is more homogeneous in terms of their risk levels, rather than divided among a few highly risky suppliers and other low-risk ones. Going one step further, our investigation of endogenous recourse fund levels for the suppliers demonstrates how financing costs affect suppliers’ investments in risk-reducing resources and, consequently, their coalition formation strategy. Last, we discuss model generalizations and show that, in general, our insights are quite robust. This paper was accepted by Serguei Netessine, operations management.