Strategic Information Sharing in Competing Channels
Liang Guo, Tian Li, Hongtao Zhang
Production and Operations Management · 2014 · Volume 23 · Issue 10
Abstract
We investigate strategic information sharing in two competing channels. The retailer in a channel canex postdecide whether to share private demand information with his upstream manufacturer after the content of information becomes known. We find that a retailer discloses low demand and withholds high demand to induce lower wholesale prices from his manufacturer. We show that a retailer should share less information when the retail market becomes more competitive, but should disclose more information when his capability to acquire information improves. When a decentralized supply chain competes with an integrated channel, we show that firms in the supply chain benefit from the rival channel's effort to improve information capability, that the incentive for the retailer in the supply chain to improve his information capability increases with the intensity of competition and with the rival channel's information capability, and that the retailer may not want to pursue perfect information acquisition even when doing so is costless. Extensive numerical studies demonstrate that similar results also hold for two decentralized supply chains competing with each other.
Keywords
competition, disclosure, supply chain, strategic information sharing, channel
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