Journal
COMPUTERS & INDUSTRIAL ENGINEERING
Volume 152, Issue -, Pages -Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/j.cie.2020.106995
Keywords
Store brand; Information asymmetry; Signaling game; Retailer-led supply chain
Funding
- Natural Science Foundation of Anhui [1908085MG228]
- National Natural Science Foundation of China [71771003]
- Outstanding and Top Talents Foundation in High Education of Anhui [gxyqZD2019058]
- Start-up Scientific Research Foundation of Anhui Jianzhu University [2019QDZ04]
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This paper explores the impact of introducing store brands on asymmetric cost information in a retailer-dominant supply chain. The results suggest that after introducing store brands, the sharing of information between manufacturers and retailers may change, thereby affecting the distribution of benefits for both parties.
The paper focuses on the topic of introducing store brands under asymmetric cost information in a retailer-dominant supply chain. We assume that the manufacturer privately knows the production cost for national brands, while the retailer only knows the distribution of the cost information. There exists a signal game between the manufacturer and the retailer after introducing store brands. In such case, when the true production cost for national brands is high, the manufacturer has to distort downward the production quantity to make the retailer believe the production cost is indeed high. Such distortion may amplify double marginalization. As a result, the retailer becomes worse off while the manufacturer becomes better/worse off from introducing store brands. In addition, the manufacturer does not share information to the retailer without introducing store brands, while the manufacturer may prefer to sharing information to the retailer with introducing store brands.
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