Abstract
With modern information and communication technologies, companies are able to better coordinate their own activities and collaborate with other firms to achieve greater efficiencies. These partnerships have spawned new decision problems for managers. Motivated by the need to coordinate intra-firm and inter-firm decision-making, my dissertation addresses different questions in each essay. The first essay examines how the relative standings of distribution channel members, including leadership, dominance, and preeminence, affect each other’s profitability. Our analysis shows that the presence of a dominant manufacturer benefits both the dominant and the weak manufacturers. The second essay studies how a large firm could coordinate its multiple divisions’ procurement activities to minimize the firm-wide procurement cost by designing transfer pricing schemes. The results show that the firm could always gain centralized procurement cost, however, when considering fairness and equity, it is possible that the firm is unable to induce all divisions to its preferred suppliers. The third essay analyzes that how an insurance company could use cash incentives to align patients to cost-effective hospitals. We develop optimal cash incentives under different conditions depending on the hospital quality, service price, and coinsurance rate.