Does looking trustworthy facilitate forecast sharing in a supply chain? An experimental study

This study aims to investigate how perceived facial trustworthiness affects strategic behavior in supply chain forecast sharing. The authors conducted controlled laboratory experiments with 990 participants forming 330 supply chain groups, systematically varying the visibility and trustworthiness levels of retailers’ facial images across four treatments using validated photographs from the Chicago Face Database. The authors’ results reveal that facial trustworthiness significantly influences supply chain behavior and performance. Channel efficiency improves when suppliers can see both retailers’ faces and those faces differ in perceived trustworthiness. However, this improvement emerges through complex mechanisms: trustworthy-looking retailers strategically distort forecasts more severely when actual demand is low but report more accurately as demand increases. Despite such strategic distortion, suppliers consistently allocate more inventory to trustworthy-looking retailers, particularly when inventory is scarce. This “trustworthiness premium” persists when controlling for actual reporting behavior. These findings provide the first systematic examination of how facial trustworthiness shapes strategic supply chain interactions.