Inducing information transparency: The roles of gray market and dual-channel

Zhong-Zhong Jiang (), Jinlong Zhao (), Zelong Yi () and Yaping Zhao ()
Additional contact information
Zhong-Zhong Jiang: Northeastern University
Jinlong Zhao: Northeastern University
Zelong Yi: Shenzhen University
Yaping Zhao: Shenzhen University

Annals of Operations Research, 2023, vol. 329, issue 1, No 10, 277-306

Abstract: Abstract Information asymmetry is particularly common in the supply chain framework. As we know, the downstream retailer usually knows more about the market demand information than the upstream manufacturer because of her proximity to consumers. This paper considers a supply chain that a manufacturer sells products to consumers via a retailer in a local market. Besides, the manufacturer has an option to establish a direct online channel in the overseas market, in which the retailer can sell products as a gray marketer to earn an extra profit. Both markets’ demand information is transparent to the retailer but asymmetric to the manufacturer. There are two side an opposite effects of information sharing on the retailer. The positive effect is that when she withholds demand information she can possess an information advantage. However, the negative effect is that when the retailer shares her private demand information, especially when the manufacturer enters the overseas market, the retailer’s profit may be negatively affected because of the competition. Therefore, whether the retailer has motivation to share her private demand information with the manufacturer is an intriguing yet unanswered question. We first characterize the tradeoff in three supply chain structures, Local Market, Dual Market and Gray Market. Then, we obtain the equilibrium results of each case and find that a co-opetition strategy may arise because of competition when considering gray market and dual-channel. Finally, we uncover the underlying reasons and develop valuable insights.

Keywords: Information sharing; Dual channel; Gray market; Co-opetition strategy (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s10479-020-03719-0 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:annopr:v:329:y:2023:i:1:d:10.1007_s10479-020-03719-0

Ordering information: This journal article can be ordered from
http://www.springer.com/journal/10479

DOI: 10.1007/s10479-020-03719-0

Access Statistics for this article

Annals of Operations Research is currently edited by Endre Boros

More articles in Annals of Operations Research from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().