Information structure selection in a green supply chain: Impacts of wholesale price and greenness level

Abstract

We investigate a green supply chain (GSC) wherein the supplier sells green products to consumers through a retailer, who has information acquisition capability to acquire private demand information. We focus on three information structures: (i) no disclosure (i.e., the retailer never discloses the acquired demand information to the supplier); (ii) voluntary disclosure (i.e., the retailer can discretionarily disclose the acquired demand information to the supplier), and (iii) mandatory disclosure (i.e., the retailer must disclose the acquired demand information to the supplier). The GSC members’ equilibrium solutions and payoffs are examined under each information structure. The retailer's information disclosure strategies under voluntary disclosure are further analyzed. Finally, we identify GSC members’ best information structure option. The results show that the supplier always prefers mandatory disclosure, while the retailer's preference depends on the joint impact of the wholesale price and the greenness level on demand. When the joint impact is higher (lower) than a specific threshold, the retailer favors no disclosure (mandatory disclosure). Regardless of the joint impact faced by the retailer, voluntary disclosure is always a robust compromise, attractive to the retailer. Our research provides valuable insights and offers important decision support for the GSC members when deciding on the information structure.