“According to a Robert Schenk paper, a downward sloping demand curve occurs when a buyer must “expend time and effort to discover prices or the characteristics of the product.” As a result, once the buyer has picked a seller, they will “stay with that supplier as long as they find the exchange satisfactory.” It is the prospect of a lengthy research process that stifles buyer willingness to look elsewhere while simultaneously fueling supplier motivation to increase price.”
AND,
“However, and this is where the University of California, Berkeley crew went off track, in the decentralized (Metaprise-centric) supply chain, the research expenditure time on the part of the buyer is dramatically reduced. As a result, not only is the propensity on the part of the supplier to increase prices kept in check, the threat of stock-outs is virtually eliminated as a result of the buyer’s ability to “reliably” engage a broader supply base.”
The above speaks directly to the power of effective data management in a Metaprise (digital) environment.
Double Marginalization Video (The Rhine River Analogy)
Procurement Insights
How do double marginalization and the Metaprise play a critical role in data management and use, e.g., harnessing the promise and power of your data?
Posted on October 4, 2023
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“There are NO Perils of Big Data in Procurement!
(In fact, it’s the lack of Big Data leading to so many failures … but that’s a different rant …)” – Michael Lamoureux, LinkedIn (September 2023)
Michael Lamoureux, your post reminded me of a 2007 post on Double Marginalization. – https://bit.ly/3PFu0Qx
Specifically the following two excerpts:
“According to a Robert Schenk paper, a downward sloping demand curve occurs when a buyer must “expend time and effort to discover prices or the characteristics of the product.” As a result, once the buyer has picked a seller, they will “stay with that supplier as long as they find the exchange satisfactory.” It is the prospect of a lengthy research process that stifles buyer willingness to look elsewhere while simultaneously fueling supplier motivation to increase price.”
AND,
“However, and this is where the University of California, Berkeley crew went off track, in the decentralized (Metaprise-centric) supply chain, the research expenditure time on the part of the buyer is dramatically reduced. As a result, not only is the propensity on the part of the supplier to increase prices kept in check, the threat of stock-outs is virtually eliminated as a result of the buyer’s ability to “reliably” engage a broader supply base.”
The above speaks directly to the power of effective data management in a Metaprise (digital) environment.
Double Marginalization Video (The Rhine River Analogy)
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