Information Disclosure Strategies Research Articles

Opaque or Transparent: Quality Disclosure Strategy for Accommodation-Sharing Platforms

Compared with the conventional hotel providing a standardized service, individual supply on an accommodation-sharing platform makes consumers uncertain about service quality, which is mainly caused by information asymmetry between the consumers and individual hosts. In this paper, we develop a game-theoretic model to study the accommodation-sharing platform’s optimal quality information disclosure and its determining factors with consideration of consumer uncertainty. We find that it is optimal to provide either opaque, i.e., completely uninformative, or transparent, i.e., fully informative, quality information. We also examine the impacts of the incumbent hotel and market heterogeneity on the platform’s quality disclosure. The results show that market heterogeneity and the hotel’s service cost jointly affect the platform’s information disclosure strategy. In general, the sharing platform provides opaque information when market heterogeneity is relatively low but provides transparent information when market heterogeneity is relatively high. However, when market heterogeneity is medium, the hotel’s service cost plays a key role in affecting its pricing strategy, hence the information disclosure strategy of the platform. Specifically, a sufficiently high price of the hotel prompts the platform to disclose transparent information. These findings provide guidance for sharing platforms to design their information disclosure systems.

The Management Strategy Of Covid-19 Pandemic Files Towards InformationPublic Disclosure In Malang City Government

Disclosure of public information becomes a medium to optimize a public oversight toward the state administration, public agencies, and everything that affects the public interest. Information disclosure is necessary to create Good Governance in encouraging governance, transparency, participation, and accountability well. The purpose of this study is to find out, describe, and analyze the strategies and factors that influence information disclosure in the management of the Covid-19 pandemic files as materials for public sector accountability in the Malang City Government. This research is conducted using a qualitative descriptive approach. Data collection techniques are carried out by in-depth and structured interviews, non-participatory observations, and documentation. The selection of informants is based on purposive sampling with certain considerations relevant to the research topic. Analysis of research data uses Creswell Model data analysis. The result of the research is that the public information disclosure strategy related to COVID-19 has not been implemented by the Malang city government

Quality disclosure in a competitive environment with consumer’s elation and disappointment

When the quality of a firm’s product is unobservable, consumers may generate some psychological feelings of elation or disappointment when the perceived product quality exceeds or falls short of their initial expectations. This paper investigates firms’ optimal information disclosure strategies in a competitive environment when consumers have such psychological feelings. We consider three market situations: a monopoly setting, a duopoly setting where firms do not share their quality information with each other, and a duopoly setting where firms share their quality information with each other, so as to understand how market competition and horizontal information sharing influence the equilibrium outcomes. We show that both psychological disappointment and elation can induce the firm(s) to disclose more quality information than that when the consumer is fully rational. In a monopoly setting, the increase of the magnitude of disappointment always undermines the firm’s profit while the increase of the magnitude of elation may hurt the firm’s profitability. In contrast, in a duopoly setting, the increase of the magnitude of disappointment and/or elation always improves the firm’s profitability. Moreover, such improvement can be further enhanced when the competing firms share their quality information upfront before making their disclosure decisions.

Optimal information disclosure strategies for a retail platform in the blockchain technology era

ABSTRACT This paper considers a retail platform selling a product to consumers and voluntarily discloses product quality information by using blockchain technology (BCT). Consumers decide whether to deliberate before making purchase decisions. We develop an analytical model to explore the effects of information disclosure strategies on the retail platform’s pricing and consumers’ deliberation decisions. Some interesting results are obtained. First, regardless of the information disclosure strategy, consumers’ deliberation and purchasing decisions depend on the deliberation cost and product price. Consumers will only deliberate if the price is at the medium level and the deliberation cost is not too high. Second, when the disclosure cost is high, the retail platform either stimulates or prevents consumer deliberation; however, when the disclosure cost is at a medium interval, the retail platform’s pricing decision depends on its information disclosure strategy. Specifically, when disclosing quality information, the retail platform will implement the stimulated deliberation (SD) or prevented deliberation (PD) strategy and will never adopt the sold at a low price (SL) strategy; however, when quality information is withheld, the retail platform will only adopt the PD strategy. Third, we identify the conditions under which the retail platform should disclose quality information when facing different disclosure costs.

Research on Dual-Channel Supply Chain Promotion Strategy

The establishment of online direct sales channels influences the selection of pricing strategies and promotion information disclosure strategies of manufacturers and retailers. Considering the consideration of consumer preference, this paper studies the influence of different promotion information disclosure modes on the promotion effect and the income of supply chain members in the dual-channel supply chain with direct online channels. Based on hoteling model, the authors establish a model on market demand of the two channels and analyze the pricing and disclosure strategies of manufacturers and retailers under different concerns of consumers. It is found that there is a unique equilibrium threshold between the two disclosure modes. Only when the selling price after promotion is lower than the threshold are manufacturers or retailers willing to make information disclosure. It is also found that the disclosure intention and strategy of manufacturer or retailer will change with different customers' concerns and the relationship between the difference of two channels promotion and the threshold value.

Dynamic Information Design: A Simple Problem on Optimal Sequential Information Disclosure

We study a dynamic information design problem in a finite-horizon setting consisting of two strategic and long-term optimizing agents, namely a principal (he) and a detector (she). The principal observes the evolution of a Markov chain that has two states, one “good” and one “bad” absorbing state, and has to decide how to sequentially disclose information to the detector. The detector’s only information consists of the messages she receives from the principal. The detector’s objective is to detect as accurately as possible the time of the jump from the good to the bad state. The principal’s objective is to delay the detector as much as possible from detecting the jump to the bad state. For this setting, we determine the optimal strategies of the principal and the detector. The detector’s optimal strategy is described by time-varying thresholds on her posterior belief of the good state. We prove that it is optimal for the principal to give no information to the detector before a time threshold, run a mixed strategy to confuse the detector at the threshold time, and reveal the true state afterward. We present an algorithm that determines both the optimal time threshold and the optimal mixed strategy that could be employed by the principal. We show, through numerical experiments, that this optimal sequential mechanism outperforms any other information disclosure strategy presented in the literature. We also show that our results can be extended to the infinite-horizon problem, to the problem where the matrix of transition probabilities of the Markov chain is time-varying, and to the case where the Markov chain has more than two states and one of the states is absorbing.

Dilemma of quality information disclosure in technology licensing

This study investigates the technology licensing decision of an incumbent patentor with quality-improving technology in duopoly model with heterogenous consumers, and quality information disclosure strategies of the patentor and the licensee that compete in quantity. A patentor is faced with a dilemma whether to disclose product quality information to consumers when technology licensing occurs and whether to encourage the licensee to disclose its quality information. While few scholars study the quality information disclosure in the background of technology licensing, these problems are of importance for the technology licensing because the disclosure decision can significantly influence the consumer belief about product quality and generate different effects on patentor's profitability. We find that the patentor can benefit from choosing information disclosure strategies. Under per-unit royalty licensing, we show that the patentor may choose not to disclose its quality information but encourage the licensee to disclose quality information. However, we find, under fixed fee licensing, when the disclosure cost is sufficiently low and quality difference is not large, only a large prior probability of the product being of high-quality can motivate the choice that the patentor disclose information and require the licensee to disclose. Interestingly, our results also suggest that per-unit royalty licensing leads to more information disclosure and higher profits than fixed-fee licensing. Our work identifies the optimal conditions under which the patentor can deal with the dilemma in quality information disclosure, proposes decision support tools in evaluating the values of quality information disclosure, and provides new management insights in quality disclosure strategy under technology licensing.

Donors, Buyers, and Information Disclosure in Crowdfunding Markets: A Case of Platform Split-up

Crowdfunding platforms, a fast-growing method for entrepreneurs to finance their ventures, are struggling in improving crowdfunding campaigns’ market performance as platforms expand to include more diverse participants. In this paper, the authors study how a platform policy that changes the platform size and backer composition (donors vs. buyers) influences the platform participant behaviors and the platform market outcomes, using an event study of Indiegogo’s launch of Generosity.com for charity campaigns. Their results show a higher probability of reaching funding goals and more funds collected for the Indiegogo platform's business campaigns after the platform split-up. Such changes are driven by fewer campaigns being launched on Indiegogo after the platform change, and more importantly, more costly campaign information (such as images and videos) provided by the campaign creators. Buyers are more sensitive to such campaign information and, therefore, contribute more to campaigns after the platform change. These results are consistent with the notion that the entrepreneurs’ information disclosure strategy is driven by potential backers’ motivations to support the campaign. The study provides rich and important managerial implications for platforms and their participants.

Quality Information Disclosure Strategies in a Dual-channel Supply Chain Considering Piracy

Quality Information Disclosure Strategies in a Dual-channel Supply Chain Considering Piracy

Dynamic Development Contests

Public, private, and not-for-profit organizations find advanced technology and product development projects challenging to manage due to the time and budget pressures, and turn to their development partners and suppliers to address their development needs. We study how dynamic development contests with enriched rank-based incentives and carefully-tailored information design can help these organizations outsource their development projects at the minimum project lead time by stimulating competition among suppliers. We show that an organization can use dynamically adjusted flexible rewards to achieve the absolute minimum expected project lead time at a significantly lower cost than a fixed-reward policy. Importantly, our flexible-reward policy pays the absolute minimum expected reward (i.e., achieves the first best). We further study the case where the organization does not have sufficient budget to offer a reward that attains the absolute minimum expected lead time. We propose that in this case, the organization can dynamically increase the contest reward until its budget constraint binds and then use information sharing as a strategic tool to incentivize suppliers. Specifically, we propose an easy-to-implement random-update policy where the organization periodically monitors the status of suppliers at random times and immediately discloses any partial progress. We show that such a random-update policy outperforms other canonical information disclosure strategies. Our results indicate that dynamic rewards and strategic information disclosure are powerful tools to help organizations outsource their development needs swiftly and cost effectively.

Technology adoption for airport security: Modeling public disclosure and secrecy in an attacker-defender game

Airport security agencies throughout the world play a vital role in safeguarding the aviation industry against terrorist attacks. As a result of the evolving and adaptive behaviors of terrorists, it is critical that security agencies continue to adopt new airport screening technologies in order to expose and deter threats. To this end, the question arises as to whether or not to publicly disclose new screening technology adoption. Although there is literature on strategic information disclosure in defensive resource allocation, to the best of our knowledge, no previous literature has focused on modeling disclosure and secrecy for defensive technology adoption. To address this gap, we develop an attacker-defender game model where the defender is considering adopting a new screening technology, and an adversary is considering attacking an aviation target. Our model addresses two distinct information disclosure strategies on behalf of the defender: (i) public disclosure, which is modeled in a sequential subgame, and (ii) secrecy, which is modeled in a simultaneous subgame. We find that in the proposed complete information game, disclosure of the defender’s technology adoption strategy is either preferred to, or equivalent to, maintaining secrecy. That is to say that the defender never prefers secrecy over disclosure. Overall, this paper helps to fill a significant gap in the literature concerning technology adoption and information disclosure strategies for airport security screening, and also has implications that can inform decision makers in the broader homeland security domain. Historical data is used to drive numerical sensitivity analyses of the equilibrium strategies.

Quality information acquisition and disclosure with green manufacturing in a closed-loop supply chain

Green manufacturers are faced with decision problems whether to acquire the quality information from third-party assessment agencies and to disclose the quality information to other supply chain members. While the existing research of closed-loop supply chain (CLSC) has not considered the voluntary and mandatory information disclosure, this study considers the quality information disclosure strategies of a green manufacturer after acquiring the quality information in the closed-loop supply chain. (1) The study first evaluates the performance of this new closed-loop supply chain system considering the quality information disclosure and acquisition, by new models integrating the quality information decisions with the remanufacturing operational decisions. To our knowledge, this paper is an early research of closed-loop supply chain to consider and compare voluntary information disclosure and mandatory information disclosure. (2) The study provides a new decision tool to assist green manufacturers in making decisions on acquiring the quality information from a third-party quality assessment agency before disclosing the quality information. Interestingly, the study finds that the profits of closed-loop supply chain members are higher under the mandatory information disclosure when the green manufacturer refuses to assess the product quality and acquire the information from a third-part quality assessment agency. (3) The study further considers the consumer preference of green products, and get useful managerial insights that the green manufacturer is willing to pay a higher information acquisition cost to acquire the quality information when consumers prefer high quality. (4) Finally, the study provides the practical implications and finds the new condition under which a green manufacturer is willing to disclose the product quality information in closed-loop supply chains.

Compensation and information disclosure strategies of a green supply chain under production disruption

This paper considers a manufacturer who produces and sells green products directly to customers via an online channel. We investigate the price compensation and information disclosure strategies to cope with a green production break. To this end, we first model the dynamic post-disruption customer behavior, considering the “observational learning” interactions facilitated by sales quantity information. Encountering the stock-out caused by production disruption, customers may leave or place backorders, depending on the factors including information learning, customer characters (sensitivities to time, price, and green level), disruption length, green level of the product, and price compensation. Then, by comparing and analyzing the optimal price compensation strategies with and without quantity information disclosure, we provide managerial insights on whether or not to disclose information during disruption, and how to adjust compensation price. The value of exposing quantity information and reducing the price is further analyzed via a numerical analysis. The results also indicate that the manufacturer could benefit more from the service of disclosing information than reducing the price in a hedge against short disruptions under some circumstances.

What are the Returns of Sustainability Reporting? An Empirical Investigation in US Manufacturers

This paper examines the long-run effects of sustainability reporting on manufacturing firms’ productivity based on a signaling perspective. Using data collected from Global Reporting Initiative (GRI), Factiva and Compustat, this study investigates the performance impacts and moderating effects of sustainability reporting for 243 US manufacturing firms in the period of 1999-2016. Through conducting event studies, our findings reveal that sustainability reporting leads to not only positive abnormal return on assets (ROA) but also labor productivity (LP). Our results suggest three moderators including sustainability-related media exposure, reporting continuity and first-time reporting. This study provides insights into implementing sustainability reporting as an effective sustainability information disclosure strategy for manufacturers.

Privacy Management in Service Systems

Problem definition: We study customer-centric privacy management in service systems and explore the consequences of extended control over personal information by customers in such systems. Methodology: We adopt a stylized queueing model to capture a service environment that features a service provider and customers who are strategic in deciding whether to disclose personal information to the service provider---that is, customers' privacy or information disclosure strategy. A customer's service request can be one of two types, which affects service time but is unknown when customers commit to a privacy strategy. The service provider can discriminate among customers, based on their disclosed information, by offering different priorities. Results: Our analysis reveals that, when given control over their personal data, strategic customers do not always choose to withhold it. We find that control over information gives customers a tool they can use to hedge against the service provider's will, which might not be aligned with the interests of customers. More importantly, we find that under certain conditions, giving customers full control over information (e.g., by introducing a privacy regulation) can not only distort already efficiently operating service system but might also backfire by leading to inferior system performance (i.e., longer average wait time) and hurt customers themselves. We demonstrate how a regulator can correct information disclosure inefficiencies through monetary incentives to customers and show that providing such incentives makes economic sense in some scenarios. Finally, the service provider itself can benefit from customers being in control of their personal information by enticing more customers joining the service. Managerial implications: Our findings yield insights into how customers' individually rational actions concerning information disclosure (e.g., granted by a privacy regulation) can lead to market inefficiencies in the form of longer wait times for services. We provide actionable prescriptions, for both service providers and regulators, that can guide their choices of a privacy and information management approach based on giving customers the option of controlling their personal information.

Research on information disclosure strategies of electricity retailers under new electricity reform in China

The Chinese government has issued “No.9 document” to start a new round of reform. Retail competition mechanism has been launched and more participants are encouraged to involve into the sell side. However, the electricity retail market is still imperfect and needs continuously improving at current stage, in which information disclosure mechanism is of great significance. This paper analyzes and compares the information disclosure strategies of power retailers under new electricity reform in China. The results show that the retail companies with better service quality are more inclined to disclose information, while sellers with poor service quality tend to hide information. Information non-transparency will result in some inefficiencies inevitably and perfect information disclosure system is expected to promote competition, thus ensuring market fairness. These findings may provide some references for the future development of the electricity retail market and electricity reform.

Dynamic Information Design: A Simple Problem on Optimal Sequential Information Disclosure

We study a dynamic information design problem in a finite-horizon setting consisting of two strategic and long-term optimizing agents, namely a principal (he) and a detector (she). The principal observes the evolution of a Markov chain that has two states, one and one absorbing state, and has to decide how to sequentially disclose information to the detector. The detector's only information consists of the messages she receives from the principal. The detector's objective is to detect as accurately as possible the time of the jump from the good to the bad state. The principal's objective is to delay the detector as much as possible from detective the jump to the bad state. For this setting, we determine the optimal strategies of the principal and the detector. The detector's optimal strategy is described by time-varying thresholds on her posterior belief of the good state. We prove that it is optimal for the principal to give no information to the detector before a time threshold, run a mixed strategy to confuse the detector at the threshold time, and reveal the true state afterwards. We present an algorithm that determines both the optimal time threshold and the optimal mixed strategy that could be employed by the principal. We show, through numerical experiments, that this optimal sequential mechanism significantly outperforms any other information disclosure strategy presented in literature.

Evolutionary dynamics of health food safety regulatory information disclosure from the perspective of consumer participation.

The “trust” attribute of health food has intensified the serious information asymmetry problem in the health food market. Moreover, it has strengthened the formation and influence of potential or hidden safety risks of health food, bringing huge impacts on social harmony and stability. Therefore, this study builds a model of health food enterprise production and operation and government regulatory information disclosure from the perspective of consumer participation. The study fully considers the government's policy burdens and the degree of consumer response to food safety regulatory information. Moreover, it aims to explore the evolution mechanism of food enterprise production and operation strategies and government regulatory information disclosure strategies and analyze the evolution process of the government behavior in health food safety regulatory information disclosure. The theoretical derivation and simulation analysis found that the more sensitive consumers are to health food safety regulatory information, the more significant the profitability improvement of enterprises producing quality health food, thus urging the government to make an objective and comprehensive disclosure of health food safety regulatory information.

Investor behavior, information disclosure strategy and counterparty credit risk contagion

Counterparty credit risk caused by the excessive expansion of credit derivatives is becoming more and more prominent. The study of evolution mechanism of its contagion will help the financial regulators set up a scientific and accessible prevention and control strategy. From the cross perspective of behavioral finance and information economics, this study analyzes the mechanism of counterparty credit risk contagion. Based on the epidemic model, a network model of it is built with the consideration of investor behavior and information disclosure strategy. The network topology characteristics of it are analyzed in theory. Meanwhile, this study analyzes the evolution characteristics of it in numerical simulation. The main conclusions are as follows: First, investor behavior or information disclosure strategy only affects counterparty credit risk contagion in local credit asset network, while it is gradually disappearing in global credit asset network. Second, noise can enhance the impact intensity of investor behavior or information disclosure strategy on counterparty credit risk contagion, and lead to the spread of counterparty credit risk synchronously in local and global credit asset networks. Third, information transmission rate has “local strengthening effect” on investor behavior. The timing of information release and the tendency of information disclosure exert a “global suppression effect” on the influence of investors, and the ability of investor information decision-making has a “local suppression effect” on the timing of information release and the tendency of information disclosure. Through the comprehensive adjustment of investor behavior and information disclosure strategy, the goal of preventing and controlling counterparty credit risk contagion can be realized in local and global credit asset networks.

The Information Disclosure Strategy of Single versus Multiple Benchmarks in Earnings Announcements

Abstract: This study is aimed to test the impact of s ingle versus multiple benchmarks earnings information disclosure strategy towards financial users’ behavior in estimating future earnings. The study is important because it links behavioral aspects between the ways of providing and using earnings information based on multiple reference point theory of psychology. Using experimental factorial mix design 2x3x2 with 58 investor and non-investor participants, the result indicates that earnings disclosure strategy of s ingle versus multiple benchmarks influences participant's judgments. Specifically , the multiple benchmarks are more effective than a single benchmark used to estimating future earnings. This finding is consistent with some priors studies of Schrand and Walther (2000), Krische (2005), Han and Tan (2007) and Wahyuni and Hartono (2010, 2012, 2014). Abstract: This study is aimed to test the impact of s ingle versus multiple benchmarks earnings information disclosure strategy towards financial users’ behavior in estimating future earnings. The study is important because it links behavioral aspects between the ways of providing and using earnings information based on multiple reference point theory of psychology. Using experimental factorial mix design 2x3x2 with 58 investor and non-investor participants, the result indicates that earnings disclosure strategy of s ingle versus multiple benchmarks influences participant's judgments. Specifically , the multiple benchmarks are more effective than a single benchmark used to estimating future earnings. This finding is consistent with some priors studies of Schrand and Walther (2000), Krische (2005), Han and Tan (2007) and Wahyuni and Hartono (2010, 2012, 2014).