Personality traits in supply chain contracting

Official URL: http://dx.doi.org/10.46254/AU01.20220625

In this paper we study the correlation between a decision-making lab experiment on a simple supply chain setting and several personality traits of the decision makers which are measured using out-of-experiment surveys. Our experiment is based on a single manufacturer – single retailer supply chain where the retailer faces random consumer demand for a perishable product and the manufacturer determines the contract parameters. We consider three different contract settings; namely wholesale price, buyback and revenue sharing contracts. We investigate the effects of self-esteem, regret aversion, risk aversion, loss aversion, and fairness concerns on manufacturer’s pricing decisions and retaler’s order quantity decisions. Despite the small sample sizes of the experiment our findings indicate that there is evidence for correlation between these personality traits and the contracting decisions of the subjects.