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Information asymmetry, pricing strategy and firm's performance in the retailer- multi-channel manufacturer supply chain

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  • Yan, Ruiliang
  • Pei, Zhi

Abstract

In this research paper, we assume a retailer-multi-channel manufacturer (with online and traditional retail channels) supply chain where both the multi-channel manufacturer and the retailer have private information about the state of consumer demand. In this setting, we examine the effect of an information sharing strategy on both firms' performance. Our results show that the multi-channel manufacturer always benefits from an information sharing strategy. When the product is highly compatible with the online channel, information sharing becomes much more valuable to the multi-channel manufacturer. On the other hand, the retailer's performance is not impacted by an information sharing strategy. Thus, a bargaining model is utilized to implement profit sharing for the multi-channel manufacturer and retailer so that an information sharing equilibrium can be reached. Based on our results, we derive optimal market strategies and identify probable paths of future research.

Suggested Citation

  • 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.
  • Handle: RePEc:eee:jbrese:v:64:y:2011:i:4:p:377-384
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    Citations

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    Cited by:

    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. Yan, Bo & Wang, Tao & Liu, Yan-ping & Liu, Yang, 2016. "Decision analysis of retailer-dominated dual-channel supply chain considering cost misreporting," International Journal of Production Economics, Elsevier, vol. 178(C), pages 34-41.
    3. repec:spr:elcore:v:18:y:2018:i:3:d:10.1007_s10660-017-9269-4 is not listed on IDEAS
    4. Bhatnagar, Amit & Syam, Siddhartha S., 2014. "Allocating a hybrid retailer's assortment across retail stores: Bricks-and-mortar vs online," Journal of Business Research, Elsevier, vol. 67(6), pages 1293-1302.
    5. repec:eee:joreco:v:20:y:2013:i:2:p:218-224 is not listed on IDEAS
    6. Xie, JiaPing & Liang, Ling & Liu, LuHao & Ieromonachou, Petros, 2017. "Coordination contracts of dual-channel with cooperation advertising in closed-loop supply chains," International Journal of Production Economics, Elsevier, vol. 183(PB), pages 528-538.
    7. Amrouche, Nawel & Yan, Ruiliang, 2012. "Implementing online store for national brand competing against private label," Journal of Business Research, Elsevier, vol. 65(3), pages 325-332.
    8. Xu, Guangye & Dan, Bin & Zhang, Xumei & Liu, Can, 2014. "Coordinating a dual-channel supply chain with risk-averse under a two-way revenue sharing contract," International Journal of Production Economics, Elsevier, vol. 147(PA), pages 171-179.
    9. repec:eee:jbrese:v:77:y:2017:i:c:p:53-67 is not listed on IDEAS
    10. Yan, Ruiliang & Cao, Zixia & Pei, Zhi, 2016. "Manufacturer's cooperative advertising, demand uncertainty, and information sharing," Journal of Business Research, Elsevier, vol. 69(2), pages 709-717.
    11. Liu, Mengqi & Cao, Erbao & Salifou, Coulibaly Kigbajah, 2016. "Pricing strategies of a dual-channel supply chain with risk aversion," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 90(C), pages 108-120.
    12. Pei, Zhi & Yan, Ruiliang, 2015. "Do channel members value supportive retail services? Why?," Journal of Business Research, Elsevier, vol. 68(6), pages 1350-1358.

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