Demand information disclosure in competing supply chains with additional service warrant

Abstract

This paper investigates the effects of retailers' information disclosing decision and manufacturer's acceptation or rejection on the additional service warrant provided by manufacturer in a supply chain with one manufacturer and two Cournot competing retailers who are endowed with some private demand information from the common market. A liner inverse demand function is assumed, and three scenarios (No Disclosing, All Disclosing, and Only One Disclosing) are considered. The paper studies the retailers' strategies and the manufacturer's optimal strategy based on retailers'. The results show that the profits of all members are influenced by several factors: the initial base demand for product, which indicate the retailer's power structure is symmetric or asymmetric; the competition intensity; the coefficient of service cost, which affects the manufacturer's and retailers' decision directly; and the volatility and accuracy of the information. And we consider that how these parameters change to make retailers reach equilibrium or a Prisoner's dilemma in the first stage of the game, and how the results and parameters changing affect the manufacturer's strategy of accepting information disclosure or not.