Abstract
Collusion can increase the transaction value among supply chain members to obtain higher loans from supply chain finance (SCF) service provider, which will bring some serious risks for SCF. However, it is difficult to be identified and restrain the SCF service provider due to its stability and hiddenness. Different SCF transaction structures will affect the profits of supply chain members from collusion. This paper develops various game models for collusion and not collusion for different SCF transaction structures and investigates the impact of SCF transaction structures on the boundary conditions of collusion. Through comparative analysis, the findings of models are as follows: (1) in a two-echelon supply chain, the supplier and retailer are more likely to conduct collusion under the sequential game than under the simultaneous game; (2) collusion in the two-echelon supply chain can obtain higher loans than that in the three-echelon supply chain, so it has more serious hidden danger; (3) in the two-echelon supply chain, collusion is easier to form than in the three-echelon SCF supply chain that has spontaneous endogenous constraints. We also develop two types of mechanisms to restrain collusion behavior from profit sharing and incomplete information perspectives. Finally, we summarize the theoretical implications and analyze the management implications through a case study.
Highlights
Collusion refers to the behavior that some firms reach a secret agreement on the price or volume of the products or services they provided and use the agreed price to replace the market price, so as to obtain more profits [1, 2]
On April 2, 2020, Luckin Coffee Inc. (NASDAQ: LK) announced that the COO and several other executives engaged in certain misconduct, including fabricating certain transactions amounting to roughly RMB 2.2 billion, resulting in the stock plunging by 80% in one day [7]
E second is the relation structures, which are often divided into master-slave relation and equivalent relation [12]. e objective of this paper is to investigate the boundary conditions of collusion between the supply chain members in different trade-based supply chain finance (SCF) transaction structures
Summary
Collusion refers to the behavior that some firms reach a secret agreement on the price or volume of the products or services they provided and use the agreed price to replace the market price, so as to obtain more profits [1, 2]. E objective of this paper is to investigate the boundary conditions of collusion between the supply chain members in different trade-based SCF transaction structures. (3) How to develop a mechanism to restrain price collusion in trade-based SCF transaction structure with hidden vulnerability from the profit sharing and incomplete information perspectives? We compare and analyze the results of these boundary conditions to confirm the advantages and disadvantages of different trade-based SCF transaction structures on restraining price collusion. Few studies have integrated collusion [14] and SCF [15] to design an effective trade-based SCF transaction structure to prevent collusion from the perspective of supply chain financial risk.
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