Abstract
This paper investigates the impacts of bilateral asymmetric information in a supply chain. More specifically, we consider a supply chain consisting of one risk-neural manufacturer and one risk-averse retailer who have their private information regarding the manufacturing cost and risk aversion degree, respectively. We first construct a model under the bilateral asymmetric information case using M-V approach. There exists a pair of threshold values of cost and risk aversion degree such that the optimal trading quantity holds. We then give a wholesale price contract under bilateral asymmetric information case to examine the information revealing. We find that the manufacturer and the retailer both announce a lower information type to gain more opportunistically individual profit. This damages the supply chain’s performance.
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Acknowledgments
This work was supported by the Ministry of Education, Humanities and Social Science Planning Fund for the Western and Frontier (No. 13XJC630014), the Ministry of Education, Humanities and Social Science Planning Fund (No. 14YJC630020), the Yong Teachers Fund for the Central University (No. 2014NZYQN30) and the fund for System Science and Enterprise Development Research Center (No. Xq14C02).
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Wang, X., Guo, H., Wang, X. (2015). Wholesale Price Contract Under Bilateral Information Asymmetry. In: Xu, J., Nickel, S., Machado, V., Hajiyev, A. (eds) Proceedings of the Ninth International Conference on Management Science and Engineering Management. Advances in Intelligent Systems and Computing, vol 362. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-47241-5_79
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DOI: https://doi.org/10.1007/978-3-662-47241-5_79
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