An incentive scheme for true information providing in Supply Chains

This paper examines the problem of how to establish an incentive scheme to furnish reliable and truthful information in Supply Chains. In the current discussion information is typically assumed to be perfect and Supply Chain Partners are presumed to behave altruistically. In our judgement these assumptions are far from realistic. In consequence we assume that opportunistic behavior can emerge and will be accompanied by incomplete and falsified information. Presenting an incentive scheme, we illustrate how a tendency towards true information providing can be constituted in Supply Chains and will be endorsed in the long run. The most important result of this approach is that a substantial change in the information policy of Supply Chains is brought about and a higher level of quality is obtained. (C) 2003 Elsevier Science Ltd. All rights reserved.