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Manufacturer product quality information disclosure with channel encroachment in the E‐commerce age

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  • Song Huang
  • Shuting Chen
  • Lei Xiao

Abstract

This study investigates the interplay between a manufacturer's quality disclosure and channel encroachment. We show that there exists a U‐shaped pattern between the manufacturer's payoff and the disclosure cost, whereas the retailer's payoff exhibits a more complicated and nonmonotonic relationship with respect to the disclosure cost. Both firms may benefit from the increase of the disclosure cost when it falls into the intermediate range and when the channel substitution rate is not too low. The increase of the encroachment cost always hurts the manufacturer, and it may even hurt the retailer if it is medium and if the channel substitution rate is low.

Suggested Citation

  • Song Huang & Shuting Chen & Lei Xiao, 2020. "Manufacturer product quality information disclosure with channel encroachment in the E‐commerce age," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(5), pages 744-761, July.
    • Handle: RePEc:wly:mgtdec:v:41:y:2020:i:5:p:744-761
    DOI: 10.1002/mde.3134
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    References listed on IDEAS

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    Cited by:

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    2. Kaiying Cao & Yunyi Su & Yuqiu Xu & Jia Wang, 2022. "“Free replacement extended warranty” or “traditional extended warranty”: Optimal extended warranty selection strategy," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 3130-3146, October.
    3. Yu Tian & Bin Dan & Ting Lei & Molin Liu, 2023. "Supplier encroachment and information transparency on fresh produce e‐commerce platform: Impacts on the traditional channel," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 733-752, March.
    4. Xiaole Dou & Zenglu Li & Chun Liu, 2022. "Secondhand product quality disclosure strategy of the retailer under different supply chain structures," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 2982-2999, October.
    5. Zhen Zhang & Songtao Zhang & Mingshi Yue, 2021. "Joint pricing and replenishment policies for risk‐averse retailers under duopolistic competition," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(7), pages 1849-1864, October.

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