W e examine a model in which a supplier sells products through an online platform and an offline retailer under conditions of demand uncertainty. The actual demand potential can be observed (or predicted accurately using rich sales data) by the platform and retailer, but not by the supplier. The model addresses the following issues. First, the supplier optimizes its multi-channel strategy, including a selling format choice in the online channel and optimal pricing. Specifically, although a traditional wholesale model is used offline, both wholesale and agency models are prepared online. Given a commission rate set by the platform for the agency model, the supplier chooses one selling format from the two models. The second one is related to the platform's information-sharing policy. The platform can commit to sharing its demand information with the supplier. This study elucidates how the platform's information sharing alters the supplier's multi-channel management and subsequently affects the retailer eventually. Results show that the platform charges its commission rate so that the supplier chooses the agency model, unless the consumer demand is sufficiently uncertain. We also demonstrate that the platform's information sharing capability makes the agency model more likely to be adopted. However, information transparency arising from the platform's voluntary information disclosure can be unfavorable to the retailer. Finally, we demonstrate that, with information sharing, a shift from wholesale to agency models can be desirable not only for the platform and supplier, but also for the retailer (i.e., Pareto-improving).
We analyze a delegation game relevant to the conduct of corporate social responsibility (CSR) in which the firm's owner offers the manager a contract consisting of firm profit and social welfare. We derive three results that distinctly differ from existing findings. First, CSR decisions are strategic complements for firms. Second, with simultaneous CSR decisions, the equilibrium price is equal to marginal cost, despite the fact that firms compete in a Cournot duopoly. Finally, with sequential CSR decisions, unlike the follower firm, the leader firm never exhibits CSR. However, the follower firm can enjoy a profit equal to that derived by the leader in a Cournot-Stackelberg game.
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