Cluster Events

Dear Professors,

The OMOR Cluster and the CERESSEC Research Center have the pleasure to invite you to our next seminar with 

Kai HOBERG - Kühne Logistics University

On Wednesday, January 14  from 12pm to 1pm

Room : N406

Title : Demand Implications of Reshoring : How Product Origin Shapes Perceptions, Purchase Intentions, and Willingness to Pay

Robin Kabelitz-Bock, Kai Hoberg, Guido Voigt

Abstract : Firms are increasingly re-evaluating global production locations due to supply chain disruptions, cost volatility, sustainability pressures, and geopolitical risks. While reshoring research has focused on cost and risk assessments, little is known about the demand-side implications of production location decisions. Building on country-of-origin (CoO) research, our study examines whether and why consumers value local product origins and how such preferences affect purchase intention (PI) and willingness to pay (WTP). Using a mult-method design, we conduct three complementary empirical studies with a total of 1.878 subjects. Study 1 employs a choice-based conjoint experiment to test consumer preferences across origins and products. Study 2 investigates the behavioral mechanisms linking origin, perceptions, PI, and WTP. Study 3 isolates the causal effects of quality, environmental, and social sustainability perceptions on these outcomes.

Across studies, consumers consistently favor local production and exhibit higher WTP for domestic goods, revealing measurable demand-side value. 

Origin affects WTP indirectly through PI, with quality as the strongest driver, complemented by environmental and social sustainability. 

The findings extend production location decision and CoO research by providing behavioral evidence of consumer-based value creation and integrating sustainability perceptions into production location decision making. For managers, the findings highlight that emphasizing credible information about production origin can justify a price premium, providing a potential lever to offset higher costs of local production and emphasizing the importance of considering both cost and demand implications of production location decisions.

Keywords: Reshoring, production location decision, country of origin, consumer behavior

If you need more information, please contact matta@essec.edu.

Best regards,

***

Mohsen ELHAFSI - School of Business, University of California, Riverside

On Wednesday, January 28  from 12pm to 1pm

Room : N406

Title : Long-Term Procurement under Supply Risks: Incentives for Production Smoothing

Abstract : Production smoothing is critical for ensuring continuous supply, price stability, and customer satisfaction, yet it remains vulnerable to dynamic supply risks. This paper examines how firms can incentivize production smoothing within procurement relationships.We study a novel long-term procurement contract in a decentralized, two-echelon supply chain, where a risk-averse buyer sources from a supplier whose supply states are private and evolve dynamically. Using a constrained optimal control framework, we derive the optimal contract and develop a divide-and-conquer algorithm to compute its components. The optimal contract balances efficiency maximization, production smoothing, and information screening, and is characterized by front-loaded premiums and elevated early production quantities. Our contributions are threefold. (i) We identify an intertemporal linkage in production quantities: the buyer raises current production while reducing future quantities—a dynamic akin to a lever-fulcrum system. This linkage arises even when control does not influence state transitions, reflecting the buyer’s motive to control rent while smoothing production. (ii) We demonstrate a constructive role of risk aversion: the buyer’s preference for production smoothing mitigates efficiency losses from information asymmetry, narrowing the gap between second-best and first-best outcomes through a preference channel. (iii) We provide actionable guidance: the buyer’s pursuit of production smoothing to hedge against uncertainty can alleviate agency problems. We caution against the irrelevance theorem that treats post-contract private information as innocuous, and we show why buyers should moderate investments in supplier information capabilities while favoring long-term procurement relationships. By highlighting the interplay between production smoothing and information asymmetry, our results contribute to both procurement theory and managerial practice.

If you need more information, please contact matta@essec.edu.

Best regards,