Agent interactions and the response of supply chains to pricing and incentives

The paper analyzes how the interactions among the freight agents influence the supply chain’s response to public policy initiatives based on pricing and incentives. The fundamental tenet of this paper is that, because of the role played by agent interactions in supply chains, carrier centered approaches are likely to be less effective than comprehensive approaches that exploit the power relations between supply chain agents to achieve policy goals. The paper characterizes the typical roles and interactions between the agents involved in supply chains; provides an economic interpretation of these interactions; and conducts a comparative analysis of the (limited) real-life evidence pertaining to the behavioral impacts of pricing and incentives. •The paper analyzes how the interactions among agents influence industry response to pricing.•The paper argues that freight policy must focus on the key decision maker.