Contracting With Asymmetric Information In A Dual-channel Supply Chain

As the rapid development of international trade and economic globalization, the mode of traditional trade has changed, partners such as the manufacture and the retailer are no longer limited to trade in domestic, and the previous selling patterns which sell the goods through physical store have been broken. The020sales model, the so-called dual-channel supply chain, through which companies can sell their goods on online not only by retail channel, is gradually introduced and applied by companies in order to capture more market shares. All these are changing the profit pattern of manufactures and retailers, and influencing our life deeply. Compared with traditional supply chain, dual-channel supply chain has some superiors, but there are also some drawbacks like the existing asymmetric information, and some conflicts itself, which will also influence the profit of the supply chain. So how to realize the optimism decision of supply chain members and design a contract to coordinate the supply chain have attracted lots of attention of scholars. This paper is aiming to discuss the problem of supply chain members’optimism decisions when the information is asymmetry and we also come up with several contracts to coordinate the dual-channel supply chain.First of all, the article present the theory of supply chain coordination and contracts, the concepts and characteristics of dual-supply chain, then we build the model of dual-supply chain and analyze the optimal decision under complete and incomplete information, which will lay a good foundation for the below content. Secondly, use the wholesale price contract to explore the optimal pricing decisions in dual-channel supply chain under asymmetric information and the influence of asymmetric information. The conclusions show that when the state of retailer’s cost is high, wholesale price and retail sale price increase, which leads to the decrease of retail demand, while the direct sale price keeps steady. The retailer can gain its reservation profit, while the manufacture suffers a loss of profit, the whole profit of supply chain decrease, and the wholesale price contract cannot coordinate the supply chain at this time. When the state of retailer’s cost is low, price and demand of both direct sale and retail sale channel unchanged except wholesale price, then retailer can earn profit due to the information advantage while the manufacture still losses, and the whole profit of supply chain keep the same as when the cost information is common known by members, and the supply chain can be coordinated by the wholesale price contract at this time. So we can know that, no matter what the state of retailer’s cost is, sharing information can benefit the manufacture. Thirdly, combined with the revenue sharing contract to analyze the optimal decisions in dual-channel supply chain under asymmetric information, as well as the value of information, and make a comparison between the two contracts. The conclusions tell us different contracts make difference between nothing except the wholesale price. At last, we use numerical experiments to illustrate our conclusion is right.The main innovation points of this paper are:(1)On the basis of previous studies, we construct the dual-channel supply chain model under asymmetric information combined with the game theory and the principal-agent theory, and study the optimal decisions of channel members.(2) Apply the wholesale price contract and revenue sharing contract to explore the coordination of dual-channel supply chain when the cost information is asymmetry.(3)Analyze the influence of asymmetric information to channel profit.