Opportunism in Supply Chain Recommendations: A Dynamic Optimization Approach

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Authors: Gila E. Fruchter
Cited by: 1
References: 13

Abstract

Supply chain partners often face a fundamental trade-off: dishonesty can provide immediate rewards, but excessive lying erodes credibility and undermines future opportunities. Prior research has documented the prevalence of deception and the value of trust, yet extant studies examine these behaviors as static choices. Much less is known about how deception evolves dynamically and how trust is eroded and restored over time. We develop a dynamic framework in which deception is treated as a decision and trust as a state that both decay naturally and are further depleted by dishonesty. The payoff structure reflects the dual role of credibility: it enables immediate benefits from deception but must be preserved to sustain future influence. To address analytical challenges, we adopt a discrete-time formulation and apply numerical optimization methods. The analysis reveals three key insights. First, lying occurs in episodic bursts rather than continuously, with opportunistic spikes in deception followed by pauses that allow trust to recover. Second, the duration of lying episodes increases with the strength of incentives to deceive. Third, deception is amplified when opportunities persist in stable environments, leading to longer episodes of dishonesty. Managerially, our findings caution against incentive schemes that overemphasize short-term performance, as they may inadvertently foster sustained opportunism. Instead, mechanisms that balance immediate gains with credibility preservation—such as rotating advisors, auditing, or transparency requirements—can mitigate the erosion of trust and sustain collaboration.

Fields of Study & Subjects

Game Theory and Applications Supply Chain and Inventory Management Supply Chain Resilience and Risk Management

Publication details

Journal / source
Modern Economy
Publisher
Scientific Research Publishing, Inc.
Volume
17
Issue
01
Pages
26–38
Publication date
1 January 2026