Study On Strategies Of The Information Leakage In The Supply Chain Under Asymmetric Information

Information sharing is the key to achieve supply chain efficiency andcoordinated operation. However, practice shows that the information sharingprocess is often accompanied by the information leakage problem, which canseriously affect the initiative to share information, reduce the cooperationtightness of upstream and downstream enterprises in the supply chain, or evenweaken the overall efficiency of the entire supply chain. Therefore, the study ofhow to realize information sharing and at the same time, ease the negative impactcaused by information leakage on the supply chain, to ensure the confidentialityas well as the interests of supply chain parties, has great practical significance.In this paper, the behavior pattern of the receiving party in the supply chainwas an important basis for the definition of information leakage. Then in the useof evidence reasoning and game theory, combined with the actual situation of theChinese market, the supply chain information leakage problems underasymmetric information and relevant countermeasures were in-depth studied,taking the horizontal competition and vertical contract into consideration.Firstly, the concept of supply chain information leakage was defined, on thebasis of whether the information receiver adopts the behavior that can result ininformation leakage deliberately or strategically. Then, by analyzing the supplychain parties’ strategic selfish behavior, the necessity of the study on thestrategies of information leakage in the supply chain under asymmetricinformation was further demonstrated.Secondly, in a supply chain which consists of a single manufacturer and tworetailers, engaged in horizontal quantity competition with different market share,one of which is the big retailer with dominant market share, while the other is the disadvantaged small retailer, the decision problems faced and the factors to beconsidered by supply chain members are in-depth analyzed. Moreover, themechanism of supply chain information leakage under asymmetry informationwas revealed by analyzing and comparing the features in the process of the tworetailers’ decision game under two cases, with the information leakage or not.Thirdly, under the premise of the assumptions that the manufacturer willalways leak information, the decision-making model based on the signaling wasconstructed, to discuss the two retailers’ ordering strategies as well as profitsunder both separating equilibrium and pooling equilibrium. What’s more,extended to the situation in which from the perspective of own interests, themanufacturer takes the initiative to choose whether leak information or not, wheninformation leakage phenomenon may exist, supply chain node enterprises’coping strategies under asymmetric information, including manufacturers, the bigretailer and the small retailer, were widely discussed, based on the comparativeanalysis of the selection problem of strategies.Studies have shown that, the manufacturer will always leak information togain better interest. Therefore when making decisions, retailers should take themanufacturer’s such a selfish behavior into account, big retailer’s strategiesselection are related to the degree of market demand fluctuation: poolingequilibrium performed better with small-fluctuation demand while separatingequilibrium performed better with large-fluctuation demand. In particular, whenthe market demand is low, the optimal order quantity of big retailer distorteddownwards, that is to pay a certain "information rent" as the expense to deal withthe information leakage.Besides, Wolfram Mathematica was used to help the model simulationanalysis to verify the relevant conclusions. It was revealed from the quantitative aspect that combined with Chinese actual situation, analyzing and solving theinformation leakage problem in the supply chain under asymmetric informationare very necessary. This paper hopes to provide decision making and theoreticalguidance to resolve similar conflicts of interest, so as to help the enterprisesamong the entire supply chain to better address the problem of informationleakage and to reduce the negative impact as much as possible in the actualoperation.