Impact of demand information sharing on organic farming adoption: An evolutionary game approach

Abstract

Consumer demand information on healthy food can be readily collected and shared through big data technologies. However, the impact of demand information sharing on the evolution of organic farming is still less understood. Consequently, we use the evolutionary game approach to study the long-term effect of information sharing on the producers’ organic farming adoption based on the profit matrix. Considering that the retailer has some private demand information, the basic models as Stackelberg games in normal forms consisting of one retailer and one producer under information symmetry and information asymmetry are established to form the profit matrix. We also employ the method of cooperation on the forecast to realize information sharing and analyze the advantages and disadvantages of information sharing. Then, we analyze the evolutionarily stable strategy of several producers and retailers playing as a two-player game. The results indicate that (Conversion, Sharing) equilibrium can be easier to achieve with higher customers’ green preference and lower effort cost, whereas (Conversion, Nonsharing) equilibrium can be easier to achieve with more accurate forecast information. More importantly, a higher initial conversion state prompts the retailers to evolve to sharing more quickly and vice versa.