Supply Chain Configuration Under Information Sharing

26 Pages Posted: 22 Sep 2012

See all articles by Mohammad Ali Kashefi

Mohammad Ali Kashefi

University of Bielefeld - Bielefeld Graduate School of Economics and Management (BiGSEM)

Date Written: September 20, 2012

Abstract

This paper examines the effect of information sharing on supply chain configuration where the market characterized by demand uncertainty. A dynamic multi-stage game theoretic model with incomplete information is employed to capture the sequence of events. Our supply chain consists of two suppliers with exogenous wholesale prices and two retailers, the incumbent and the entrant, with asymmetric demand information. Informed incumbent prefers to conceal its private information from the entrant in order to reap more profits in the market. The channel of information flows is only through the first supplier and the incumbent can supply just from him, but the entrant is free to choose its proper supplier considering the point that the second supplier is uninformed. Our analytical model demonstrates that how the mean demand of the market, wherein our retailers compete, and its relation with the relative wholesale price of the suppliers play crucial role in equilibrium determination. Our results show under which circumstances separation and pooling equilibrium could occur in some range of demand variation. It is also shown that the entrant sometimes prefers to avoid information acquisition by choosing the second supplier and playing Cournot instead of Stackelberg which is more profitable for him in some occasions.

Keywords: Information Sharing, Asymmetric Information, Supply Chain, Dynamic Game, Signaling Game, Demand Uncertainty, Strategic Information Management

JEL Classification: C61, C72, D82, L13, L81, M11, Y40

Suggested Citation

Kashefi, Mohammad Ali, Supply Chain Configuration Under Information Sharing (September 20, 2012). Available at SSRN: https://ssrn.com/abstract=2150077 or http://dx.doi.org/10.2139/ssrn.2150077

Mohammad Ali Kashefi (Contact Author)

University of Bielefeld - Bielefeld Graduate School of Economics and Management (BiGSEM) ( email )

Universit├Ątsstra├če 25
Bielefeld, NRW 33613
Germany

HOME PAGE: http://www.bigsem.de

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
76
Abstract Views
857
rank
380,969
PlumX Metrics