Sourcing and pricing decisions under upstream competition with a financially distressed supplier, endogenous bankruptcy risk, and a backup supply option
研究了制造商在供应商面临财务困境时，如何通过采购决策支持困境供应商，并分析了供应商破产风险内生时，非困境供应商的定价策略（如溢价或掠夺性定价）。
To maintain future supplier competition, manufacturers may support financially distressed suppliers by sourcing from them, even if they are less efficient than competitors, and by procuring larger quantities from them at higher prices. We analyze these strategies in a model in which a manufacturer decides for one of two available suppliers, supplier bankruptcy risk is endogenous, and financial distress can lead to internal or external reorganization. Following bankruptcy, the remaining supplier may serve as a backup option. Our research identifies settings in which the manufacturer should support the distressed supplier. We also find that in some cases, a nondistressed supplier may charge price premiums due to its competitor's distress, while in other cases, it may use predatory pricing to drive its competitor into bankruptcy. We complement our results with a small case study and show how our model can explain patterns observed in industry.