IDEAS home Printed from https://ideas.repec.org/a/eee/ejores/v289y2021i2p582-594.html
   My bibliography  Save this article

Analysis of a dyadic sustainable supply chain under asymmetric information

Author

Listed:
  • Raj, Alok
  • Modak, Nikunja Mohan
  • Kelle, Peter
  • Singh, Bharati

Abstract

We model a sustainable supply chain with simultaneous consideration of greening and Corporate Social Responsibility by supplier and buyer and analyze it for four different decision alternatives. In the first two cases, a single supply chain agent looks after both greening and social responsibility, in the other two cases, one agent takes one of the responsibilities. We compared these four cases by considering both full information and asymmetric information about the buyer's marginal production cost. Using the supplier Stackelberg game, we obtained the optimal values of decision variables under both information scenarios. The supplier negotiates with the buyer using the wholesale price contract or the linear two-part tariff contract. The second one is the dominating choice. For this contract the value of information is also higher for all decision alternatives. We have revealed the conditions under which the supplier would be benefited by choosing the greening effort and where the buyer would be benefited by taking up social responsibility. Further, we have designed a cut-off policy and found that the supplier and buyer can trade without conflicts only at a high level of consumer sensitivity towards greening and social responsiveness. This result suggests that if sustainability is left completely on consumer pressure, then the supplier and the buyer may not incorporate sustainability in the supply chain practices. We could specify those consumer sensitivity levels under which there must be government regulations to derive sustainability.

Suggested Citation

  • Raj, Alok & Modak, Nikunja Mohan & Kelle, Peter & Singh, Bharati, 2021. "Analysis of a dyadic sustainable supply chain under asymmetric information," European Journal of Operational Research, Elsevier, vol. 289(2), pages 582-594.
    • Handle: RePEc:eee:ejores:v:289:y:2021:i:2:p:582-594
    DOI: 10.1016/j.ejor.2020.07.042
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0377221720306688
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejor.2020.07.042?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. Yan, Ruiliang & Cao, Zixia, 2017. "Product returns, asymmetric information, and firm performance," International Journal of Production Economics, Elsevier, vol. 185(C), pages 211-222.
    2. Panda, S. & Modak, N.M. & Basu, M. & Goyal, S.K., 2015. "Channel coordination and profit distribution in a social responsible three-layer supply chain," International Journal of Production Economics, Elsevier, vol. 168(C), pages 224-233.
    3. Barbosa-Póvoa, Ana Paula & da Silva, Cátia & Carvalho, Ana, 2018. "Opportunities and challenges in sustainable supply chain: An operations research perspective," European Journal of Operational Research, Elsevier, vol. 268(2), pages 399-431.
    4. Modak, Nikunja Mohan & Kazemi, Nima & Cárdenas-Barrón, Leopoldo Eduardo, 2019. "Investigating structure of a two-echelon closed-loop supply chain using social work donation as a Corporate Social Responsibility practice," International Journal of Production Economics, Elsevier, vol. 207(C), pages 19-33.
    5. Zhu, Wenge & He, Yuanjie, 2017. "Green product design in supply chains under competition," European Journal of Operational Research, Elsevier, vol. 258(1), pages 165-180.
    6. Yenipazarli, Arda, 2017. "To collaborate or not to collaborate: Prompting upstream eco-efficient innovation in a supply chain," European Journal of Operational Research, Elsevier, vol. 260(2), pages 571-587.
    7. Panda, Shibaji, 2014. "Coordination of a socially responsible supply chain using revenue sharing contract," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 67(C), pages 92-104.
    8. S Swami & J Shah, 2013. "Channel coordination in green supply chain management," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 64(3), pages 336-351, March.
    9. Charles J. Corbett & Deming Zhou & Christopher S. Tang, 2004. "Designing Supply Contracts: Contract Type and Information Asymmetry," Management Science, INFORMS, vol. 50(4), pages 550-559, April.
    10. Biswas, Indranil & Avittathur, Balram & Chatterjee, Ashis K, 2016. "Impact of structure, market share and information asymmetry on supply contracts for a single supplier multiple buyer network," European Journal of Operational Research, Elsevier, vol. 253(3), pages 593-601.
    11. Kopel, Michael & Brand, Björn, 2012. "Socially responsible firms and endogenous choice of strategic incentives," Economic Modelling, Elsevier, vol. 29(3), pages 982-989.
    12. Rajiv D. Banker & Inder Khosla & Kingshuk K. Sinha, 1998. "Quality and Competition," Management Science, INFORMS, vol. 44(9), pages 1179-1192, September.
    13. Albert Y. Ha, 2001. "Supplier‐buyer contracting: Asymmetric cost information and cutoff level policy for buyer participation," Naval Research Logistics (NRL), John Wiley & Sons, vol. 48(1), pages 41-64, February.
    14. Ma, Peng & Shang, Jennifer & Wang, Haiyan, 2017. "Enhancing corporate social responsibility: Contract design under information asymmetry," Omega, Elsevier, vol. 67(C), pages 19-30.
    15. Ghosh, Debabrata & Shah, Janat, 2012. "A comparative analysis of greening policies across supply chain structures," International Journal of Production Economics, Elsevier, vol. 135(2), pages 568-583.
    16. Chen, Wenbo, 2018. "Retailer-driven carbon emission abatement with consumer environmental awareness and carbon tax: Revenue-sharing versus Cost-sharingAuthor-Name: Yang, Huixiao," Omega, Elsevier, vol. 78(C), pages 179-191.
    17. Soytas, Mehmet Ali & Denizel, Meltem & Durak Usar, Damla, 2019. "Addressing endogeneity in the causal relationship between sustainability and financial performance," International Journal of Production Economics, Elsevier, vol. 210(C), pages 56-71.
    18. Jayaram, Jayanth & Avittathur, Balram, 2015. "Green supply chains: A perspective from an emerging economy," International Journal of Production Economics, Elsevier, vol. 164(C), pages 234-244.
    19. Karl Widerquist, 2018. "The Bottom Line," Exploring the Basic Income Guarantee, in: A Critical Analysis of Basic Income Experiments for Researchers, Policymakers, and Citizens, chapter 0, pages 93-98, Palgrave Macmillan.
    20. Mani, Venkatesh & Gunasekaran, Angappa, 2018. "Four forces of supply chain social sustainability adoption in emerging economies," International Journal of Production Economics, Elsevier, vol. 199(C), pages 150-161.
    21. Ni, Debing & Li, Kevin W. & Tang, Xiaowo, 2010. "Social responsibility allocation in two-echelon supply chains: Insights from wholesale price contracts," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1269-1279, December.
    22. Ghosh, Debabrata & Shah, Janat, 2015. "Supply chain analysis under green sensitive consumer demand and cost sharing contract," International Journal of Production Economics, Elsevier, vol. 164(C), pages 319-329.
    23. Chen, Xu & Wang, Xiaojun & Chan, Hing Kai, 2017. "Manufacturer and retailer coordination for environmental and economic competitiveness: A power perspective," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 97(C), pages 268-281.
    24. Brandenburg, Marcus & Govindan, Kannan & Sarkis, Joseph & Seuring, Stefan, 2014. "Quantitative models for sustainable supply chain management: Developments and directions," European Journal of Operational Research, Elsevier, vol. 233(2), pages 299-312.
    25. Xu, Xiaoping & He, Ping & Xu, Hao & Zhang, Quanpeng, 2017. "Supply chain coordination with green technology under cap-and-trade regulation," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 433-442.
    26. Reefke, Hendrik & Sundaram, David, 2017. "Key themes and research opportunities in sustainable supply chain management – identification and evaluation," Omega, Elsevier, vol. 66(PB), pages 195-211.
    27. Biswas, Indranil & Raj, Alok & Srivastava, Samir K., 2018. "Supply chain channel coordination with triple bottom line approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 213-226.
    28. Panda, Shibaji & Modak, Nikunja Mohan & Cárdenas-Barrón, Leopoldo Eduardo, 2017. "Coordinating a socially responsible closed-loop supply chain with product recycling," International Journal of Production Economics, Elsevier, vol. 188(C), pages 11-21.
    29. Gregory E. Goering, 2007. "The strategic use of managerial incentives in a non-profit firm mixed duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 83-91.
    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. Gurmeet Singh & Indranil Biswas & Samir K Srivastava, 2023. "Managing supply chain with green and non‐green products: Channel coordination and information asymmetry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1359-1372, March.
    2. Belhadi, Amine & Kamble, Sachin S. & Mani, Venkatesh & Venkatesh, V.G. & Shi, Yangyan, 2021. "Behavioral mechanisms influencing sustainable supply chain governance decision-making from a dyadic buyer-supplier perspective," International Journal of Production Economics, Elsevier, vol. 236(C).
    3. Ma, Xueli & Mao, Jinyue & Luo, Qian & Bai, Qingguo, 2024. "Effects of information superiority and green optimism on green supply chains under different power structures," International Journal of Production Economics, Elsevier, vol. 268(C).
    4. Wang, Moran & Guo, Xiaolong & Wang, Shouyang, 2022. "Financial hedging in two-stage sustainable commodity supply chains," European Journal of Operational Research, Elsevier, vol. 303(2), pages 803-818.
    5. Ye, Yi & Guo, Qiang & Nie, Jiajia, 2023. "Retailer information strategies with a dual-purpose manufacturer," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 180(C).
    6. Liu, Zhi & Zheng, Xiao-Xue & Li, Deng-Feng & Liao, Chen-Nan & Sheu, Jiuh-Biing, 2021. "A novel cooperative game-based method to coordinate a sustainable supply chain under psychological uncertainty in fairness concerns," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 147(C).
    7. Giat, Yahel & Manes, Eran, 2023. "Firm response to ethically motivated boycotts," European Journal of Operational Research, Elsevier, vol. 305(1), pages 300-311.
    8. Ji, Jingna & Li, Tao & Yang, Lei, 2023. "Pricing and carbon reduction strategies for vertically differentiated firms under Cap-and-Trade regulation," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 171(C).
    9. Awasthy, Prakash & Gouda, Sirish & Ghosh, Debabrata & Swami, Sanjeev, 2022. "Analyzing product greening spillovers in multi-product markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 158(C).
    10. Wei, Wanying & Liu, Weihua & Tang, Ou & Dong, Chuanwen & Liang, Yanjie, 2023. "CSR investment for a two-sided platform: Network externality and risk aversion," European Journal of Operational Research, Elsevier, vol. 307(2), pages 694-712.
    11. Cheng, Fei & Chen, Tong & Shen, Yuting & Jing, Xiaodong, 2022. "Impact of green technology improvement and store brand introduction on the sales mode selection," International Journal of Production Economics, Elsevier, vol. 253(C).
    12. Caiquan Duan & Fengmin Yao & Zhongqiu Li & Hui Yu, 2022. "Multi‐period closed‐loop supply chain network equilibrium considering CSR investment and sharing mechanism," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(5), pages 1579-1595, July.

    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. Biswas, Indranil & Raj, Alok & Srivastava, Samir K., 2018. "Supply chain channel coordination with triple bottom line approach," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 115(C), pages 213-226.
    2. Kumar, Patanjal & Baraiya, Rajendra & Das, Debashree & Jakhar, Suresh Kumar & Xu, Lei & Mangla, Sachin Kumar, 2021. "Social responsibility and cost-learning in dyadic supply chain coordination," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 156(C).
    3. Awasthy, Prakash & Gouda, Sirish & Ghosh, Debabrata & Swami, Sanjeev, 2022. "Analyzing product greening spillovers in multi-product markets," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 158(C).
    4. Abhishek Srivastava & Abhishek Chakraborty & Arqum Mateen, 2022. "Role of power imbalance on channel coordination under greening investments," OPSEARCH, Springer;Operational Research Society of India, vol. 59(4), pages 1522-1554, December.
    5. Gurmeet Singh & Indranil Biswas & Samir K Srivastava, 2023. "Managing supply chain with green and non‐green products: Channel coordination and information asymmetry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 1359-1372, March.
    6. Raza, Syed Asif, 2018. "Supply chain coordination under a revenue-sharing contract with corporate social responsibility and partial demand information," International Journal of Production Economics, Elsevier, vol. 205(C), pages 1-14.
    7. Ma, Peng, 2021. "Optimal generic and brand advertising efforts in a decentralized supply chain considering customer surplus," Journal of Retailing and Consumer Services, Elsevier, vol. 60(C).
    8. Biswas, Indranil & Gupta, Rohit & Tiwari, Sunil & Talluri, Srinivas, 2023. "Multi-echelon supply chain coordination: Contract sequence and cut-off policies," International Journal of Production Economics, Elsevier, vol. 259(C).
    9. El Ouardighi, Fouad & Sim, Jeongeun & Kim, Bowon, 2021. "Pollution accumulation and abatement policies in two supply chains under vertical and horizontal competition and strategy types," Omega, Elsevier, vol. 98(C).
    10. Hafezi, Maryam & Zhao, Xuan & Zolfagharinia, Hossein, 2023. "Together we stand? Co-opetition for the development of green products," European Journal of Operational Research, Elsevier, vol. 306(3), pages 1417-1438.
    11. Varun Sharma & Alok Raj & Abhishek Chakraborty, 2023. "Analysis of power dynamics in sustainable supply chain under non-linear demand setup," Operations Management Research, Springer, vol. 16(1), pages 18-32, March.
    12. Wang, Zizhuo & Wang, Mingzheng & Liu, Weiwei, 2020. "To introduce competition or not to introduce competition: An analysis of corporate social responsibility investment collaboration in a two-echelon supply chain," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 133(C).
    13. Yong Liu & Bing-ting Quan & Jiao Li & Jeffrey Yi-Lin Forrest, 2018. "A Supply Chain Coordination Mechanism with Cost Sharing of Corporate Social Responsibility," Sustainability, MDPI, vol. 10(4), pages 1-25, April.
    14. Chen, Wenbo, 2018. "Retailer-driven carbon emission abatement with consumer environmental awareness and carbon tax: Revenue-sharing versus Cost-sharingAuthor-Name: Yang, Huixiao," Omega, Elsevier, vol. 78(C), pages 179-191.
    15. Gan Wan & Gang Kou & Tie Li & Feng Xiao & Yang Chen, 2020. "Pricing Policies in a Retailer Stackelberg O2O Green Supply Chain," Sustainability, MDPI, vol. 12(8), pages 1-16, April.
    16. Matsui, Kenji, 2019. "A supply chain member should set its margin later if another member's cost is highly uncertain," European Journal of Operational Research, Elsevier, vol. 275(1), pages 127-138.
    17. Johari, Maryam & Hosseini-Motlagh, Seyyed-Mahdi & Rasti-Barzoki, Morteza, 2019. "An evolutionary game theoretic model for analyzing pricing strategy and socially concerned behavior of manufacturers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 506-525.
    18. Qian Wang & Yongguang Zhong & Guangye Xu, 2019. "Optimal Decisions and Coordination in a Socially Responsible Supply Chain with Irresponsibility Risk," Sustainability, MDPI, vol. 11(24), pages 1-16, December.
    19. Hosseini-Motlagh, Seyyed-Mahdi & Govindan, Kannan & Nematollahi, Mohammadreza & Jokar, Abbas, 2019. "An adjustable bi-level wholesale price contract for coordinating a supply chain under scenario-based stochastic demand," International Journal of Production Economics, Elsevier, vol. 214(C), pages 175-195.
    20. Fakheri, Sajjad & Bahrami-Bidoni, Zeynab & Makui, Ahmad & Pishvaee, Mir Saman & Santibanez Gonzalez, Ernesto DR., 2022. "A sustainable competitive supply chain network design for a green product under uncertainty: A case study of Iranian leather industry," Socio-Economic Planning Sciences, Elsevier, vol. 84(C).

    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:ejores:v:289:y:2021:i:2:p:582-594. 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/eor .

    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.