We test a hypothesis that in supply chains, partners put more weight on division of risk then on financial results of the deal. We aim to investigate risk allocation principles in supply chains. If the proposition that the division of risk is more important than financial part of the deal proven correct, then different information is needed in phase of contracting and the value on information about risk propensities is more important. We test a model in which the measure of risk and a measure of risk propensity can be determinants of “risk sharing” which in turn enhances the long term business results (profits, revenue and market share). Risk sharing is measured in two ways: by chosen contracts and by the compensation scheme for the deal. The arguments for proposing this model are drawn from agency theory.

Economics