Behavioral determinants of supply chain integration and coexistence

Published Date
December 2016, Vol.25:55–77, doi:10.1016/j.jfe.2016.08.001

Author 

Christian Kimmich ^a,b,,

Urs Fischbacher ^c,d

aSwiss Federal Research Institute WSL, Zürcherstrasse 111, 8903 Birmensdorf, Switzerland

bMasaryk University, Faculty of Social Studies, Joštova 10, 61500 Brno, Czech Republic

cUniversity of Konstanz, P.O. Box 131, 78457 Konstanz, Germany

• dThurgau Institute of Economics, Hauptstrasse 90, 8280 Kreuzlingen, Switzerland

Received 15 March 2016. Accepted 2 August 2016. Available online 15 September 2016.

Abstract

Economic theory considers physical production characteristics and related property rights as key determinants of the organization of an industry. Yet, we frequently observe coexisting governance modes within industries and firms, even when the transaction attributes of a commodity are homogenous. We test whether risk and time preferences, price expectations, and trust in supply chain types can explain variations and coexistence in governance. Specifically, we experimentally elicit economic preferences of forest managers in the Swiss wood sector. We find that all behavioral dimensions are related to the choice of sales channel. Most importantly, trust and expectations are key determinants in transferring property rights, while risk aversion, patience, and ownership structure explain the existence of plural forms at the firm level.

JEL classification

C93

D22

L22

L73

Q23

Keywords

Industrial organization

Time preferences

Risk preferences

Price expectations

Institutional trust

Plural forms

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  Corresponding author at: Swiss Federal Research Institute WSL, Zürcherstrasse 111, 8903 Birmensdorf, Switzerland. Fax: +41 44 739 22 15.

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