IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v158y2014icp37-43.html
   My bibliography  Save this article

The strategic peril of information sharing in a vertical-Nash supply chain: A note

Author

Listed:
  • Bian, Junsong
  • Guo, Xiaolei
  • Lai, Kin Keung
  • Hua, Zhongsheng

Abstract

Conventional wisdom suggests that information sharing benefits at least one of the participants. However, we find that information sharing can be strategically detrimental to both members in a vertical-Nash supply chain. Comparative statics show that each supply chain member׳s beneficial areas are smaller when its information source becomes more variable and larger as its signal is less accurate. Furthermore, the Pareto-inferior areas in which both supply chain members get worse are non-monotonic in exogenous parameters.

Suggested Citation

  • Bian, Junsong & Guo, Xiaolei & Lai, Kin Keung & Hua, Zhongsheng, 2014. "The strategic peril of information sharing in a vertical-Nash supply chain: A note," International Journal of Production Economics, Elsevier, vol. 158(C), pages 37-43.
    • Handle: RePEc:eee:proeco:v:158:y:2014:i:c:p:37-43
    DOI: 10.1016/j.ijpe.2014.07.016
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527314002333
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2014.07.016?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Esther Gal-Or & Tansev Geylani & Anthony J. Dukes, 2008. "Information Sharing in a Channel with Partially Informed Retailers," Marketing Science, INFORMS, vol. 27(4), pages 642-658, 07-08.
    2. Hau L. Lee & Kut C. So & Christopher S. Tang, 2000. "The Value of Information Sharing in a Two-Level Supply Chain," Management Science, INFORMS, vol. 46(5), pages 626-643, May.
    3. Shamir, Noam, 2012. "Strategic information sharing between competing retailers in a supply chain with endogenous wholesale price," International Journal of Production Economics, Elsevier, vol. 136(2), pages 352-365.
    4. Vives, Xavier, 1984. "Duopoly information equilibrium: Cournot and bertrand," Journal of Economic Theory, Elsevier, vol. 34(1), pages 71-94, October.
    5. Gal-Or, Esther, 1985. "Information Sharing in Oligopoly," Econometrica, Econometric Society, vol. 53(2), pages 329-343, March.
    6. Wu, Ing-Long & Chuang, Cheng-Hung & Hsu, Chien-Hua, 2014. "Information sharing and collaborative behaviors in enabling supply chain performance: A social exchange perspective," International Journal of Production Economics, Elsevier, vol. 148(C), pages 122-132.
    7. Zhang, Juliang & Chen, Jian, 2013. "Coordination of information sharing in a supply chain," International Journal of Production Economics, Elsevier, vol. 143(1), pages 178-187.
    8. S. Chan Choi, 1991. "Price Competition in a Channel Structure with a Common Retailer," Marketing Science, INFORMS, vol. 10(4), pages 271-296.
    9. Chuan He & Johan Marklund & Thomas Vossen, 2008. "—Vertical Information Sharing in a Volatile Market," Marketing Science, INFORMS, vol. 27(3), pages 513-530, 05-06.
    10. Lode Li, 2002. "Information Sharing in a Supply Chain with Horizontal Competition," Management Science, INFORMS, vol. 48(9), pages 1196-1212, September.
    11. Cho, Myeonghwan & Jun, Byung-hill, 2013. "Information sharing with competition," Economics Letters, Elsevier, vol. 119(1), pages 81-84.
    12. Dukes, Anthony & Gal-Or, Esther & Geylani, Tansev, 2011. "Who benefits from bilateral information exchange in a retail channel?," Economics Letters, Elsevier, vol. 112(2), pages 210-212, August.
    13. Jagmohan S. Raju & Abhik Roy, 2000. "Market Information and Firm Performance," Management Science, INFORMS, vol. 46(8), pages 1075-1084, August.
    14. Albert Y. Ha & Shilu Tong & Hongtao Zhang, 2011. "Sharing Demand Information in Competing Supply Chains with Production Diseconomies," Management Science, INFORMS, vol. 57(3), pages 566-581, March.
    15. Liang Guo, 2009. "The Benefits of Downstream Information Acquisition," Marketing Science, INFORMS, vol. 28(3), pages 457-471, 05-06.
    16. Jeong, In-Jae, 2012. "A centralized/decentralized design of a full return contract for a risk-free manufacturer and a risk-neutral retailer under partial information sharing," International Journal of Production Economics, Elsevier, vol. 136(1), pages 110-115.
    17. Ding, Huiping & Guo, Baochun & Liu, Zhishuo, 2011. "Information sharing and profit allotment based on supply chain cooperation," International Journal of Production Economics, Elsevier, vol. 133(1), pages 70-79, September.
    18. Wu, Cheng-Han & Chen, Chieh-Wan & Hsieh, Chung-Chi, 2012. "Competitive pricing decisions in a two-echelon supply chain with horizontal and vertical competition," International Journal of Production Economics, Elsevier, vol. 135(1), pages 265-274.
    19. Lingxiu Dong & Chakravarthi Narasimhan & Kaijie Zhu, 2009. "Product Line Pricing in a Supply Chain," Management Science, INFORMS, vol. 55(10), pages 1704-1717, October.
    20. Yue, Xiaohang & Mukhopadhyay, Samar K. & Zhu, Xiaowei, 2006. "A Bertrand model of pricing of complementary goods under information asymmetry," Journal of Business Research, Elsevier, vol. 59(10-11), pages 1182-1192, October.
    21. Mukhopadhyay, Samar K. & Yao, Dong-Qing & Yue, Xiaohang, 2008. "Information sharing of value-adding retailer in a mixed channel hi-tech supply chain," Journal of Business Research, Elsevier, vol. 61(9), pages 950-958, September.
    22. Chu, Wai Hung Julius & Lee, Ching Chyi, 2006. "Strategic information sharing in a supply chain," European Journal of Operational Research, Elsevier, vol. 174(3), pages 1567-1579, November.
    23. Esther Gal-Or, 1987. "First Mover Disadvantages with Private Information," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 54(2), pages 279-292.
    24. Zhu, Xiaowei & Mukhopadhyay, Samar K. & Yue, Xiaohang, 2011. "Role of forecast effort on supply chain profitability under various information sharing scenarios," International Journal of Production Economics, Elsevier, vol. 129(2), pages 284-291, February.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Matsui, Kenji, 2021. "Buyer’s strategic demand information sharing with an upstream echelon for entry promotion," International Journal of Production Economics, Elsevier, vol. 242(C).
    2. Li-Hao Zhang & Cheng Zhang & Jie Yang, 2023. "Impacts of power structure and financing choice on manufacturer’s encroachment in a supply chain," Annals of Operations Research, Springer, vol. 322(1), pages 273-319, March.
    3. Titah, Ryad & Shuraida, Shadi & Rekik, Yacine, 2016. "Integration breach: Investigating the effect of internal and external information sharing and coordination on firm profit," International Journal of Production Economics, Elsevier, vol. 181(PA), pages 34-47.
    4. Feng Tao & Yanhong Xie & Yao-Yu Wang & Fujun Lai & Kin Keung Lai, 2022. "Contract strategies in competitive supply chains subject to inventory inaccuracy," Annals of Operations Research, Springer, vol. 309(2), pages 641-661, February.
    5. Tian Li & Hongtao Zhang, 2023. "Gaining by ceding ‐ bounded wholesale pricing for information sharing in a supply chain," Production and Operations Management, Production and Operations Management Society, vol. 32(3), pages 829-843, March.
    6. Kim Hua Tan & W. P. Wong & Leanne Chung, 2016. "Information and Knowledge Leakage in Supply Chain," Information Systems Frontiers, Springer, vol. 18(3), pages 621-638, June.
    7. Baozhuang Niu & Zongbao Zou, 2017. "Better Demand Signal, Better Decisions? Evaluation of Big Data in a Licensed Remanufacturing Supply Chain with Environmental Risk Considerations," Risk Analysis, John Wiley & Sons, vol. 37(8), pages 1550-1565, August.
    8. Li, Tian & Zhang, Hongtao, 2015. "Information sharing in a supply chain with a make-to-stock manufacturer," Omega, Elsevier, vol. 50(C), pages 115-125.
    9. Tatyana Chernonog, 2021. "Strategic information sharing in online retailing under a consignment contract with revenue sharing," Annals of Operations Research, Springer, vol. 300(2), pages 621-641, May.
    10. Ma, Miaomiao & Meng, Weidong & Huang, Bo & Li, Yuyu, 2023. "The influence of dual credit policy on new energy vehicle technology innovation under demand forecast information asymmetry," Energy, Elsevier, vol. 271(C).
    11. Chen Shieh-Liang & Nguyen Thi Huyen Tran & Nguyen Thi Thu Ha, 2016. "Concerns of Vietnamese Producing-exporting Seafood SMEs (VPESSMEs) on Supply Chain," International Business Research, Canadian Center of Science and Education, vol. 9(6), pages 120-130, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bian, Wenliang & Shang, Jennifer & Zhang, Juliang, 2016. "Two-way information sharing under supply chain competition," International Journal of Production Economics, Elsevier, vol. 178(C), pages 82-94.
    2. Rakesh Niraj & Chakravarthi Narasimhan, 2017. "Examining Incentives to Share Demand Information with your Channel Partner," International Journal of Information Technology & Decision Making (IJITDM), World Scientific Publishing Co. Pte. Ltd., vol. 16(04), pages 961-980, July.
    3. Li, Tian & Zhang, Hongtao, 2015. "Information sharing in a supply chain with a make-to-stock manufacturer," Omega, Elsevier, vol. 50(C), pages 115-125.
    4. Brian Mittendorf & Jiwoong Shin & Dae-Hee Yoon, 2013. "Manufacturer marketing initiatives and retailer information sharing," Quantitative Marketing and Economics (QME), Springer, vol. 11(2), pages 263-287, June.
    5. Wei-Shiun Chang & Daniel A. Sanchez-Loor, 2020. "Downstream Information Leaking and Information Sharing Between Partially Informed Retailers," Journal of Industry, Competition and Trade, Springer, vol. 20(4), pages 733-760, December.
    6. Brian Mittendorf & Jiwoong Shin & Dae-Hee Yoon, 2013. "Manufacturer marketing initiatives and retailer information sharing," Quantitative Marketing and Economics (QME), Springer, vol. 11(2), pages 263-287, June.
    7. Weixin Shang & Albert Y. Ha & Shilu Tong, 2016. "Information Sharing in a Supply Chain with a Common Retailer," Management Science, INFORMS, vol. 62(1), pages 245-263, January.
    8. Matsui, Kenji, 2021. "Buyer’s strategic demand information sharing with an upstream echelon for entry promotion," International Journal of Production Economics, Elsevier, vol. 242(C).
    9. Mukhopadhyay, Samar K. & Yue, Xiaohang & Zhu, Xiaowei, 2011. "A Stackelberg model of pricing of complementary goods under information asymmetry," International Journal of Production Economics, Elsevier, vol. 134(2), pages 424-433, December.
    10. Noam Shamir, 2017. "Cartel Formation Through Strategic Information Leakage in a Distribution Channel," Marketing Science, INFORMS, vol. 36(1), pages 70-88, January.
    11. Xiaowei Zhu, 2017. "Outsourcing management under various demand Information Sharing scenarios," Annals of Operations Research, Springer, vol. 257(1), pages 449-467, October.
    12. Arcan Nalca, & Tamer Boyaci, & Saibal Ray, 2017. "Consumer taste uncertainty in the context of store brand and national brand competition," ESMT Research Working Papers ESMT-17-01, ESMT European School of Management and Technology.
    13. Li, Xiaojing & Chen, Jing & Ai, Xingzheng, 2019. "Contract design in a cross-sales supply chain with demand information asymmetry," European Journal of Operational Research, Elsevier, vol. 275(3), pages 939-956.
    14. Zhang, Jian & Nault, Barrie R., 2023. "Information sharing in an MTO supply chain with upstream adjustments," European Journal of Operational Research, Elsevier, vol. 308(1), pages 97-112.
    15. Baojun Jiang & Lin Tian & Yifan Xu & Fuqiang Zhang, 2016. "To Share or Not to Share: Demand Forecast Sharing in a Distribution Channel," Marketing Science, INFORMS, vol. 35(5), pages 800-809, September.
    16. Esther Gal-Or & Tansev Geylani & Anthony J. Dukes, 2008. "Information Sharing in a Channel with Partially Informed Retailers," Marketing Science, INFORMS, vol. 27(4), pages 642-658, 07-08.
    17. Liang Guo & Ganesh Iyer, 2010. "Information Acquisition and Sharing in a Vertical Relationship," Marketing Science, INFORMS, vol. 29(3), pages 483-506, 05-06.
    18. Yan, Ruiliang & Pei, Zhi, 2011. "Information asymmetry, pricing strategy and firm's performance in the retailer- multi-channel manufacturer supply chain," Journal of Business Research, Elsevier, vol. 64(4), pages 377-384, April.
    19. Hyoduk Shin & Tunay I. Tunca, 2010. "Do Firms Invest in Forecasting Efficiently? The Effect of Competition on Demand Forecast Investments and Supply Chain Coordination," Operations Research, INFORMS, vol. 58(6), pages 1592-1610, December.
    20. Yue, Xiaohang & Liu, John, 2006. "Demand forecast sharing in a dual-channel supply chain," European Journal of Operational Research, Elsevier, vol. 174(1), pages 646-667, October.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:158:y:2014:i:c:p:37-43. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.