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We investigate how information asymmetry and procurement contracting strategies interact to influence the supply chain parties' incentives to collaborate. We consider a number of procurement contracting strategies, and identify a simple strategy, expected margin commitment (EMC), that effectively promotes collaboration. The manufacturer prefers EMC if collaboration leads to a large reduction in unit cost and\/or demand variability is low. Otherwise, a screening contract based on price and quantity is preferred. We also find that, paradoxically, ex post efforts to enhance supply chain efficiency may hinder ex ante collaboration that precedes production.<\/jats:p>This paper was accepted by Yossi Aviv, operations management.<\/jats:p>","DOI":"10.1287\/mnsc.1120.1573","type":"journal-article","created":{"date-parts":[[2012,10,25]],"date-time":"2012-10-25T04:31:16Z","timestamp":1351139476000},"page":"189-206","source":"Crossref","is-referenced-by-count":173,"title":["Collaborative Cost Reduction and Component Procurement Under Information Asymmetry"],"prefix":"10.1287","volume":"59","author":[{"given":"Sang-Hyun","family":"Kim","sequence":"first","affiliation":[{"name":"Yale School of Management, Yale University, New Haven, Connecticut 06511"}]},{"given":"Serguei","family":"Netessine","sequence":"additional","affiliation":[{"name":"INSEAD, 77305 Fontainebleau, France"}]}],"member":"109","reference":[{"issue":"3","key":"B2","first-page":"75","volume":"46","author":"Anderson E","year":"2005","journal-title":"Sloan Management Rev."},{"key":"B3","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.47.10.1326.10260"},{"key":"B4","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1060.0654"},{"key":"B5","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.46.6.776.11939"},{"key":"B6","doi-asserted-by":"publisher","DOI":"10.2307\/2555639"},{"key":"B7","volume-title":"Contract Theory","author":"Bolton P","year":"2005"},{"key":"B8","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1080.0961"},{"key":"B9","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1090.1010"},{"key":"B10","doi-asserted-by":"publisher","DOI":"10.2307\/2556017"},{"key":"B11","volume-title":"Design and Manage to Life Cycle Cost","author":"Blanchard BS","year":"1978"},{"key":"B12","volume-title":"Introduction to Stochastic Programming","author":"Birge JR","year":"1997"},{"key":"B13","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1040.0217"},{"issue":"4","key":"B14","first-page":"71","volume":"40","author":"Corbett CJ","year":"1999","journal-title":"Sloan Management Rev."},{"key":"B15","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1030.0173"},{"key":"B16","doi-asserted-by":"crossref","volume-title":"Collaborative Advantage: Winning Through Extended Enterprise Supplier Networks","author":"Dyer JH","year":"2000","DOI":"10.1093\/oso\/9780195130683.001.0001"},{"key":"B17","doi-asserted-by":"publisher","DOI":"10.1016\/S0377-2217(02)00590-8"},{"key":"B18","doi-asserted-by":"publisher","DOI":"10.1002\/1520-6750(200102)48:1<41::AID-NAV3>3.0.CO;2-M"},{"key":"B19","doi-asserted-by":"publisher","DOI":"10.2307\/41166019"},{"key":"B20","doi-asserted-by":"publisher","DOI":"10.1287\/mnsc.1040.0214"},{"key":"B21","doi-asserted-by":"publisher","DOI":"10.1002\/nav.20372"},{"key":"B22","unstructured":"Kim S-H, Swinney R. 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