Operations Research, Systems Engineering and Industrial Engineering Commons^™

Supply Chain Information Sharing In A Macro Prediction Market, Zhiling Guo, Fang Fang, Andrew B. Whinston

Research Collection School Of Computing and Information Systems

This paper aims to address supply chain partners' incentives for information sharing from an information systems design perspective. Specifically, we consider a supply chain characterized by N geographically distributed retailers who order a homogeneous product from one manufacturer. Each retailer's demand risk consists of two parts: a systematic risk part that affects all retailers and an idiosyncratic risk part that only has a local effect. We propose a macro prediction market to effectively elicit and aggregate useful information about systematic demand risk. We show that such information can be used to achieve accurate demand forecast sharing and better channel coordination …