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VERTICAL INFORMATION EXCHANGE IN A SUPPLY CHAIN WITH DUOPOLY RETAILERS

VERTICAL INFORMATION EXCHANGE IN A SUPPLY CHAIN WITH DUOPOLY RETAILERS We consider a supply chain with one manufacturer in the upstream and two competing retailers in the downstream. The retailers sell differentiated goods and are endowed with some private demand information. The paper shows that the manufacturer's optimal strategy is independent of the type of downstream competition, Cournot or Bertrand, and that no information will be shared with the manufacturer on a voluntary basis. However, complete information sharing, which benefits all three parties, can be achieved through side payment when the retailers' information is statistically less accurate or when the leakage effect is more beneficial to the retailers. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Production and Operations Management Wiley

VERTICAL INFORMATION EXCHANGE IN A SUPPLY CHAIN WITH DUOPOLY RETAILERS

ZHANG, HONGTAO
Production and Operations Management , Volume 11 (4) – Dec 1, 2002
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References (15)

Publisher
Wiley
Copyright
© 2002 Production and Operations Management Society
ISSN
1059-1478
eISSN
1937-5956
DOI
10.1111/j.1937-5956.2002.tb00476.x
Publisher site
See Article on Publisher Site

Abstract

We consider a supply chain with one manufacturer in the upstream and two competing retailers in the downstream. The retailers sell differentiated goods and are endowed with some private demand information. The paper shows that the manufacturer's optimal strategy is independent of the type of downstream competition, Cournot or Bertrand, and that no information will be shared with the manufacturer on a voluntary basis. However, complete information sharing, which benefits all three parties, can be achieved through side payment when the retailers' information is statistically less accurate or when the leakage effect is more beneficial to the retailers.

Journal

Production and Operations Management – Wiley

Published: Dec 1, 2002

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