The Supply Chain Members’ Decision-Making Considering Information Disclosure

In order to study disclosure mechanism of demand and price information between horizontal members in the process of longitudinal supply chain members’information sharing, a basic model consisting of one supplier and two competing manufacturers (incumbent and entrant) is established. Considering the disclosure of incumbent’s order quantity, the involved parties’profits and consumer welfare are analyzed further. Following is the conversion of the Cournot competition into Bertrand competition. By using the Principal-agent theory, the pricing strategies of the two manufacturers are discussed under the conditions of information confidentiality and information disclosure of the supplier. The mechanism of supplier’s behavioral choices is analyzed. When the wholesale price is exogenous, the optimal wholesale price was analyzed from the supplier’s point of view by using a numerical example. The results are as follows:Firstly, when the manufacturers compete on the quantity of products, for the entrant, the optimal manufacturer’s profits can be determined by the concrete or average market demand in the situation of high demand or low demand while the gap between the market states is apparent; For consumer welfare, when the demand is high, the consumer welfare is higher under information confidentiality than that of information disclosure.Secondly, under the circumstances that the manufacturers are competing on the price of products, once the disclosure of product’s price occurs, the manufacturers will choose the separating equilibrium price. The entrant can judge that the market is high when the incumbent’s price is higher than separating equilibrium price, otherwise low market demand. When the product pricing of the incumbent is at the minimum disclosure interval, the supplier will disclose the incumbent’s pricing information; When the wholesale price is exogenous, the setup of the optimal wholesale price only relates to revenue sharing rate and substitute rate of the product, and the optimal wholesale price decreases with the increase of revenue sharing rate, and increases with the increase of product substitution rate.