Pricing Strategies For Products’ Recycling Under The Mechanism Of Supply Chain Information Leakage

Valuable information sharing is the key element to improve supply chain performance. However, information leakage issue often occurs with information sharing in a supply chain. Information leakage will cause serious threat to the cooperation among the members of the supply chain, which not only can reduce the enthusiasm to share information, but also can completely break their partnerships.Considering the continuous expansion of recycling market for waste products and the common phenomenon of supply chain information leakage, information leakage issue is introduced into the research on products’recycling pricing strategies in a reverse supply chain. Based on game theory and the principal-agent theory, we discuss the recycling pricing strategies of the waste products under asymmetric information leakage.Firstly, we confirm the importance of third-party logistics enterprises for recycling and universality of information leakage issue through the analysis of practical problems and specific case studies. Meanwhile, we define the basic connotation of supply chain information leakage by summarizing domestic and foreign related literatures.Secondly, we assume that there exists asymmetric market demand information between the incumbent and the entrant according to the length of time that the third-party recyclers enter the market. Then, we investigate the optimal products’recycling pricing strategies for all the members in a reverse supply chain composed of a manufacturer and the two above recyclers under the mechanism of information leakage.Thirdly, we assume that there exists asymmetric recycling cost information between the dominant recycler and the following recycler considering the level of technology that the third-party recyclers use to recycle products. Analogously, under the mechanism of information leakage, we analyze the optimal products’recycling pricing strategies of a reverse supply chain including a manufacturer and the two above recyclers.Finally, a signaling game model is established between third-party recyclers under the mechanism of demand information leakage based on the principal-agent theory. And then we analyze the optimal recycling pricing strategies for third-party recyclers from the perspective of pooling equilibrium and separating equilibrium. On the base of above, we conduct further discussion on the selection of the optimal equilibrium strategies between the two third-party recyclers.