VERTICAL INFORMATION EXCHANGE IN A SUPPLY CHAIN WITH DUOPOLY RETAILERS
Production and Operations Management · 2002 · Volume 11 · Issue 4
DOI: 10.1111/j.1937-5956.2002.tb00476.x
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.
Keywords
INFORMATION SHARING, SUPPLY CHAIN, COMPETITION, EQUILIBRIUM, EXPECTED PROFIT
Enable JavaScript for citation tools and additional paper interactions.