Date of Award

Spring 5-15-2017

Author's School

Graduate School of Arts and Sciences

Author's Department

Business Administration

Additional Affiliations

Olin Business School

Degree Name

Doctor of Philosophy (PhD)

Degree Type



This dissertation examines important operations issues in dealing with supply chain partnership and sustainability, which are among the key issues firms face in nowadays business situations.In the first chapter, "Co-opetitive component supply partnerships with end-product rivals under information asymmetry: role of dual sourcing and component market efficiency'', we consider opportunities of horizontal cooperation at the component (or intermediate product) supply level between two firms that are rivals at the end-product market. One of our firms is vertically integrated (VI) and has in-house component production capabilities, and may also sell components to its rival. The competitor in the end-product market (CO) outsources components from an outside supplier, but is willing to consider a supply partnership with VI. When CO has private demand information, the CO's component sourcing strategy and the VI's wholesale prices are substantially different from the intuition. The VI firm always offers a better wholesale price than the outside supplier. Under certain conditions, the CO sources exclusively from the outside supplier even though VI offers a lower component price. Under other conditions, the CO may use a dual sourcing strategy even though there is no capacity constraint or supply reliability concerns for the low price supply source. We identify demand uncertainty and efficiency of outside component market as the factors affecting the rationale, how to of execution (single vs. dual sourcing), and profitability of co-opetitive component supply partnership. Efficient component markets support pooling equilibria and protect private demand information. Inefficient component markets lead to separating equilibria with lowered wholesale prices serving as information rent to acquire demand information. The VI leverages inefficient component markets to extract information and increase her profitability, especially under high demand uncertainty. Interestingly, even though such a partnership benefits the firms, it can also benefit consumers' welfare.In the second chapter, ``Government subsidies for green technology development under uncertainty'', we investigate the government's subsidy design problem for firms' green technology development in an evolving industry and the subsidy's impact on environment and social welfare. Without subsidy, social welfare may either increase or decrease as the industry evolves over time, depending on the environmental benefit of the green technology. However, when the government provides a subsidy for green technology development, social welfare is always improved as the industry evolves. Furthermore, the optimal subsidy level is not affected by the firms' technological efficiency. Interestingly, if the government only considers the environmental benefits of the technology and its costs, the subsidy policy may be detrimental to the environment, compared to the case where social welfare is considered for decision making.We derive further insights into the government's subsidy policy, and its role in firms' technology development decisions, and social welfare under different industry environments.In the third chapter, ``Government financing for clean technology development: environmental effect and bankruptcy risk'', we study government financing for a firm's clean technology development under a financial constraint. The main interest of this paper is to investigate the impact of government financing on environment and the firm's bankruptcy risk when market uncertainty exists. Our analysis shows that government financing improves environment, compared to bank financing. Surprisingly, the government financing, however, exposes the firm to higher bankruptcy risk. This finding is consistent with criticisms on the current U.S. government's loan program for clean technology due to high profile bankruptcies of firms funded by the program.However, our analysis further shows that the government financing benefits both the firm and consumers. Hence, our results also shed light on the benefit of the government financing.


English (en)

Chair and Committee

Panos Kouvelis & Fuqiang Zhang

Committee Members

Lingxiu Dong, Jacob Feldman, John Nachbar,


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