Contracting with asymmetric cost information in a dual-channel supply chain

Abstract

The optimal wholesale contract design problem is modeled in a dual-channel supply chain under information asymmetry. We consider the games with asymmetric cost information and full information respectively, derive the corresponding equilibrium strategies and profits, and conduct detailed comparisons and analyses. We investigate the impact of asymmetric cost information on the equilibrium strategies and profits of partners in the supply chain and analyze the values of the cost information from the perspectives of the partners and the whole system respectively.