Abstract
The growing tendency for suppliers to encroach on the retailers’ market has forced the retailers, being independent entities, to distort shared information to maintain their information superiority. Previous studies on asymmetric information assumed that retailers share information truthfully or that demand satisfies a two-point distribution, which does not always conform to the reality of the dual-channel supply chain. Considering the potential information leakage problem, this paper studied the optimal strategies of the participants and focused on the strategic information management of the dual-channel supply chain. By introducing the retailers’ adverse selection behavior, a sequential game model under general uncertain demand was established, which replaced the classic high-low demand model. The perfect Bayesian Nash equilibrium was characterized, which depended on stochastic demand disturbance, product heterogeneity, supply chain structure, and market investigation cost. The results showed that asymmetric information made the supply chain management inefficient. When the demand disturbance was within the threshold, the retailer distorted order quantity to maintain the information advantage under potential information leakage, and information acquisition was not always good for the retailer—in some cases due to adverse selection problems. A numerical example and a sensitivity analysis were done to validate the model. Our work provides participants in the dual-channel supply chain with decision-making support and direction for improving information management.
Highlights
With the emergence of e-commerce and the growing trend of costumers online shopping, many traditional suppliers have increased internet channels of direct sales to occupy more market share
Considering potential information leakage, this paper proposes the optimal strategies of the retailer and the supplier in a dual-channel supply chain (Proposition 1)
With the development of the dual-channel supply chain, how to make decisions and manage information strategies is a significant issue in supply chain management
Summary
With the emergence of e-commerce and the growing trend of costumers online shopping, many traditional suppliers have increased internet channels of direct sales to occupy more market share. Yan and Pei [24] researched a special dual-channel market in which each retailer had direct and traditional channels to sell competitive products to consumers They found that the retailers were motivated to exaggerate their predictions when sharing information, which made the retailers’. Our paper contributes to the existing literature by proposing strategic information sharing in dual-channel supply chain and analyzing the impact of adverse selection behavior on supply chain efficiency. To supplement the research gap and take into account the information leakage, this study first analyzed the optimal quantity strategy in a dual-channel supply chain under asymmetric information and focused on the role of the retailers’ adverse selection behaviors.
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