Inventory in vertical relationships with private information and interdependent values


Journal Article

We study the use of inventory when a distributor is better informed about demand than a manufacturer. We find that when distributor and manufacturer values are interdependent it is optimal to endow the distributor with some inventory before it obtains its private information. We characterize the final allocation of the good and show that the distributor may have too few (many) units relative to the efficient allocation when demand is high (low). © IAET.

Full Text

Duke Authors

Cited Authors

  • Anton, J; Biglaiser, G; Lewis, T

Published Date

  • March 1, 2011

Published In

Volume / Issue

  • 7 / 1

Start / End Page

  • 51 - 63

Electronic International Standard Serial Number (EISSN)

  • 1742-7363

International Standard Serial Number (ISSN)

  • 1742-7355

Digital Object Identifier (DOI)

  • 10.1111/j.1742-7363.2010.00153.x

Citation Source

  • Scopus