Delegation, Monitoring, and Incentives: A Field Experiment in Supply Chain Governance

Last registered on October 29, 2025
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Pre-Trial

Trial Information

General Information

Title
Delegation, Monitoring, and Incentives: A Field Experiment in Supply Chain Governance
RCT ID
AEARCTR-0016528
Initial registration date
August 07, 2025

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
August 08, 2025, 7:25 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Last updated
October 29, 2025, 4:06 AM EDT

Last updated is the most recent time when changes to the trial's registration were published.

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Primary Investigator

Name
Qinrui Xiahou
Affiliation
The University of Hong Kong
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Other Primary Investigator(s)

PI Name
Guojun He
PI Affiliation
The University of Hong Kong
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PI Name
Hao Chen
PI Affiliation
The University of Hong Kong
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Additional Trial Information

Status
On going
Start date
2025-06-30
End date
2026-03-31
Keywords
Environment & Energy, Firms & Productivity, Governance
Additional Keywords
Environmental, Social, and Governance (ESG), Corporate Social Responsibility (CSR), Supply Chain Management, Randomized Controlled Trial (RCT), Multitasking, Delegation
JEL code(s)
C93, D23, L22, L23, M14, Q56
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
This paper investigates how firms can design governance structures to manage complex objectives in global supply chains. We conduct a randomized controlled trial (RCT) with a large publicly listed firm in China and its network of 149 suppliers, testing how horizontal and vertical allocations of authority affect supplier behavior. Guided by theories of multitasking (Holmström & Milgrom, 1991) and delegation (Aghion & Tirole, 1997), the intervention independently varies the strength of incentives tied to future orders, the scope of third-party auditing, and the specification of environmental, social, and governance (ESG) key performance indicators. Supplier outcomes are measured through a centralized data platform that tracks supplier engagement (data completeness, documentation), objective performance (over 30 ESG indicators), and extensive-margin decisions (contract renewal). The findings aim to provide empirical insights into effective governance structures for sustainable supply chains, addressing the increasing stakeholder and regulatory demands for corporate social responsibility in emerging markets.
External Link(s)

Registration Citation

Citation
Chen, Hao, Guojun He and Qinrui Xiahou. 2025. "Delegation, Monitoring, and Incentives: A Field Experiment in Supply Chain Governance." AEA RCT Registry. October 29. https://doi.org/10.1257/rct.16528-1.2
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Targeted versus comprehensive ESG data verification, strong versus weak incentive structure, and mandated versus self-selected ESG improvement metrics in supply chain management
Intervention Start Date
2025-09-01
Intervention End Date
2026-03-31

Primary Outcomes

Primary Outcomes (end points)
ESG and financial performance of suppliers (measured through a centralized data platform)
Primary Outcomes (explanation)
1) data completeness as a measure of supplier engagement with the ESG platform
2) the quality of supplier engagement through the number of supporting documents and explanatory comments uploaded for all completed indicators
3) objective ESG performance indices using Company A’s established scoring system that is known to all suppliers
4) financial performance data from the same online system to examine potential trade-offs between ESG outcomes and traditional accounting metrics
4) supplier contract renewal decisions as an extensive margin outcome

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Control;
T1 (Vertical Intervention): T1A (Mandated ESG Improvement Metrics) versus T1B (Self-Selected ESG Improvement Metrics);
T2 (Horizontal Intervention): T2A (Comprehensive ESG Data Verification) versus T2B (Targeted ESG Data Verification), and T2C (Weak Incentive) versus T2D (Strong Incentive)
Experimental Design Details
Not available
Randomization Method
Block Randomization
Randomization Unit
Firm (Supplier)
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
N/A
Sample size: planned number of observations
149 firms * 12 months
Sample size (or number of clusters) by treatment arms
Roughly 50 firms in control and 50 firms in each of the treatment arms (T1A-T2D)
* Note that our treatment arms are cross-cutting with each other to investigate the interaction between different combinations of management practices
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number
Analysis Plan