Dual‐Channel Distribution: The Case for Cost Information Asymmetry

2020 ◽  
Author(s):  
Long Gao ◽  
Liang Guo ◽  
Adem Orsdemir
Keyword(s):  
Information Asymmetry ◽  
Cost Information ◽  
Channel Distribution ◽  
Dual Channel

Equilibrium Analysis of Dual-Channel Supply Chain Under Retailer's Greening Cost Information Asymmetry

2020 ◽  
Vol 13 (4) ◽  
pp. 1-22
Author(s):  
Rofin T. M. ◽  
Biswajit Mahanty
Keyword(s):  
Supply Chain ◽  
Information Asymmetry ◽  
Complete Information ◽  
Equilibrium Analysis ◽  
Theoretic Model ◽  
Cost Information ◽  
Dual Channel ◽  
Game Theoretic ◽  
Dual Channel Supply Chain ◽  
The Impact

The purpose of this study is to investigate the impact of information asymmetry of retailer's greening cost on the performance of both the manufacturer and the retailer. The study considers a dual-channel supply chain comprising of a manufacturer and a retailer committed to green operations. The authors have employed sequential game theoretic model to derive the closed form expressions corresponding to the two cases under consideration, that is: (1) complete information and (2) asymmetric information. They have found that the sharing of greening cost information by the retailer can make both the manufacturer and the retailer better off in terms of profit. They have also found that the greening cost information sharing is all the more important when the greening cost efficiency is weak. The study helps retail managers to make a decision on whether to conceal or reveal the greening cost information with the upstream manufacturer.

scholarly journals Optimal contract design for dual-channel supply chains under information asymmetry

2017 ◽  
Vol 32 (8) ◽  
pp. 1087-1097 ◽  
Author(s):  
Honglin Yang ◽  
Erbao Cao ◽  
Kevin Jiang Lu ◽  
Guoqing Zhang
Keyword(s):  
Supply Chain ◽  
Information Asymmetry ◽  
Revenue Sharing ◽  
Information Value ◽  
Cost Information ◽  
Content Type ◽  
Dual Channel ◽  
Asymmetric Cost ◽  
Dual Channel Supply Chain ◽  
Asymmetric Cost Information

Purpose The aim of this paper is to investigate the effect of information asymmetry on revenue sharing contracts and performance in a dual-channel supply chain. First, the authors model the optimum revenue sharing contract in a dual-channel supply chain under both the full information case and the asymmetric information case. Second, they contrast the optimal decisions of a dual-channel supply chain between the full information case and the asymmetric information case. Third, they explore the impact of asymmetric cost information on the performance of a dual-channel supply chain and investigate the information value. Design/methodology/approach The authors present two main issues associated with revenue sharing contracts to alleviate manufacturer–retailer conflicts in a dual-channel supply chain. In the first issue, a revenue sharing contract is designed in a dual-channel supply chain under asymmetric cost information conditions, based on the principal-agent model. In the second issue, an optimal revenue sharing contract under full information conditions, based on the Stackelberg game is discussed. They explore the impact of asymmetric cost information on the performance of a dual-channel supply chain and investigate the information value based on comparative static analysis. Findings First, the direct sale price is unchanged and independent of the retailer’s cost construct, but the wholesale price increases and the retail sale price does not decrease under asymmetric cost information. The information asymmetry leads to higher direct sale demand and lower retail sale demand. Second, information asymmetry is beneficial for the retailer, but imposes inefficiency on the manufacturer and the whole supply chain. Third, the performance of the dual-channel supply chain is improved if the retailer’s cost information is shared and the dual-channel supply chain reaches coordination. The retailer is willing to share its cost information if the lump sum side payment that the manufacturer offers can make up the retailer’s reduced profit due to sharing this information. Originality/value The authors proposed a contract menus design model in a dual-channel supply chain. They examine how information asymmetry affects optimal policies and performance. They compared the optimal policies under symmetric information and asymmetric information. Conditions under which the partners prefer sharing information are identified. They quantified the information value from the points of partners and the whole system.

scholarly journals A Rising E-Channel Tide Lifts All Boats? The Impact of Manufacturer Multichannel Encroachment on Traditional Selling and Leasing

2016 ◽  
Vol 2016 ◽  
pp. 1-18 ◽  
Author(s):  
Wei Yan ◽  
Youwei Li ◽  
Ying Wu ◽  
Mark Palmer
Keyword(s):  
Marketing Strategy ◽  
Distribution Systems ◽  
Marketing Strategies ◽  
The Internet ◽  
Anecdotal Evidence ◽  
Channel Distribution ◽  
Dual Channel ◽  
Set Up ◽  
Product Durability ◽  
The Impact

Organizing and managing channels of distribution is an important marketing task. Due to the emergence of electronic commerce on the Internet, e-channel distribution systems have been adopted by many manufacturers. However, academic and anecdotal evidence both point to the pressures arising from this new e-channel manufacturing environment. Question marks therefore remain on how the addition of this e-channel affects the traditional marketing strategies of leasing and selling. We set up several two-period dual-channel models in which a manufacturer sells a durable product through both a manufacturer-owned e-channel and an independent reseller (leaser) who adopts selling (leasing) to consumers. Our main results indicate that, direct selling cost aside, product durability plays an important role in shaping the strategies of all members. With either marketing strategy, the additional expansion of an e-channel territory may secure Pareto gains, in which all members benefit.

scholarly journals Research on Cost Information Sharing and Channel Choice in a Dual-Channel Supply Chain

2016 ◽  
Vol 2016 ◽  
pp. 1-12 ◽  
Author(s):  
Huihui Liu ◽  
Shuguang Sun ◽  
Ming Lei ◽  
G. Keong Leong ◽  
Honghui Deng
Keyword(s):  
Supply Chain ◽  
Information Sharing ◽  
Channel Structure ◽  
General Distribution ◽  
Cost Information ◽  
Direct Sales ◽  
Channel Choice ◽  
Dual Channel ◽  
The Cost ◽  
Dual Channel Supply Chain

Many studies examine information sharing in an uncertain demand environment in a supply chain. However there is little literature on cost information sharing in a dual-channel structure consisting of a retail channel and a direct sales channel. Assuming that the retail sale cost and direct sale cost are random variables with a general distribution, the paper investigates the retailer’s choice on cost information sharing in a Bertrand competition model. Based on the equilibrium outcome of information sharing, the manufacturer’s channel choice is discussed in detail. Our paper provides several interesting conclusions. In both single- and dual-channel structures, the retailer has little motivation to share its private cost information which is verified to be valuable for the manufacturer. When the cost correlation between the two channels increases, our analyses show that the manufacturer’s profit improves. However, when channel choice is involved, the value of information could play a different role. The paper finds that a dual-channel structure can benefit the manufacturer only when the cost correlation is sufficiently low. In addition, if the cost correlation is weak, the cost fluctuation will bring out the advantage of a dual-channel structure and adding a new direct channel will help in risk pooling.

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