Signaling strategies in a low-carbon supply chain with platform encroachment

Abstract

Information asymmetry and e-commerce platform encroachment affect the production and sales strategies of manufacturers, wherein sales information is an effective signal to realize information disclosure. Meanwhile, the low-carbon characteristics of products provide manufacturers with an alternative signal option. We establish a dynamic signaling game model in which a manufacturer sells green products through a platform and the sales potential of the product is unknown to the platform in the first stage. The platform encroaches on the manufacturer with high sales potential (HM) in the second stage. This encroachment behavior prompts the HM to disguise itself as a manufacturer with low sales potential (LM) to evade platform encroachment, thereby aggravating information asymmetry. We explore the signals that the LM should use to separate itself from the HM more efficiently and the optimal low-carbon production strategies under three signaling strategies (i.e., sales, carbon, and dual signals). We reveal that the carbon signal gives the HM a stronger motivation to disguise itself than the sales signal, thereby increasing the LM’s separating costs but decreasing the environmental impact. In addition, the LM should choose the sales signal in a high-quality market; in contrast, the dual (carbon) signal is optimal in a general (low-quality) market. Our results offer insights for green manufacturing and signal selection under information asymmetry and platform encroachment.