Deterrence effect of risk aversion information sharing on supplier encroachment

Yue, Mingshi; Zhang, Songtao; Zhang, Zhen

doi:10.1016/j.cie.2022.108246

Cited by 6 publications

(5 citation statements)

References 71 publications

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“…In this section, we explore situations where the retailer is risk-averse or altruistic or both. As previously mentioned, several fashion and food retailers exhibit risk aversion to uncertain demand (Choi, 2018;Yue et al, 2022), and some retailers show altruism toward their manufacturers to ensure supply chain stability and integrity, such as Coca-Cola and Starbucks (Kallasvuo et al, 2007;Khan et al, 2015). Moreover, we also observed that some retailers show both risk aversion and altruism, such as Fast Retailing (Choi, 2018;Fast Retailing, 2020).…”

Section: Discussionsupporting

confidence: 61%

“…Cai et al (2020b) assume that the retailer's risk aversion is its private information and study whether the retailer shares it with the supplier and find that the retailer shares the risk information only if the true level of her risk aversion is lower than the average estimated by other participants. Yue et al (2022) explore the motivation of a retailer to share her risk-averse information under supplier encroachment and show that the retailer voluntarily shares information to prevent supplier encroachment when her selling cost is intermediate. The difference between our study and the above studies is that we focus on ex ante information-sharing strategy and explore how the interaction of risk aversion and altruism affects the retailer's demand information-sharing decision.…”

Section: Risk Aversionmentioning

confidence: 99%

“…When information is shared, the manufacturer maximizes his expected profit U BS m = (w − c) E[(θ − p)|s] by choosing w based on s. In our paper, the manufacturer's expected utility is equivalent to the expected profit since the manufacturer is risk-neutral. To align with the retailer's utility, we use the manufacturer's expected utility in our model (Cai et al, 2022;Yue et al, 2022). When information is not shared, the manufacturer maximizes his expected utility…”

Section: T Imentioning

confidence: 99%

“…High demand fluctuations usually bring high operational risks for firms (Yue et al, 2022). According to a survey by KPMG, 43% of retail chief executive officers (CEOs) and consumers claimed that supply chain risk was the top risk to their companies' growth in the next three years (Wilson, 2021).…”

Section: Introductionmentioning

confidence: 99%

“…According to a survey by KPMG, 43% of retail chief executive officers (CEOs) and consumers claimed that supply chain risk was the top risk to their companies' growth in the next three years (Wilson, 2021). Firms typically exhibit risk-averse in making decisions when market demand is highly volatile and unpredictable, especially in the fashion, food, electronics, and cosmetics industries (Agrawal and Seshadri, 2000;Choi, 2018;Yue et al, 2022). Some companies avoid risks by adopting certain measures.…”

Section: Introductionmentioning

confidence: 99%

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Information sharing in the presence of retailer's risk aversion and altruism

Huang

2023

Int Trans Operational Res

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In highly uncertain times, firms are increasingly exhibiting risk aversion to uncertain demand and altruism to supply chain partners to reduce risk and maintain stability. To deal with high demand fluctuations, numerous firms are adopting information‐sharing strategies. We study how a retailer's risk aversion and altruism affect her demand information‐sharing decision by constructing game‐theoretic models. We first show that information sharing makes double marginalization (DM) stronger and hurts the retailer and generates an information‐sharing DM effect. The retailer's risk aversion strengthens this effect, while her altruism weakens the effect. Meanwhile, information sharing generates an uncertainty reduction effect on the risk‐averse retailer by reducing volatility and an altruism improvement effect on the altruistic retailer by increasing the manufacturer's profit. Whether information sharing benefits the retailer depends on her level of risk aversion and altruism. The retailer prefers voluntary sharing when both her risk aversion and altruism are high.

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Section: Discussionsupporting

confidence: 61%

Section: Risk Aversionmentioning

confidence: 99%

Section: T Imentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Information sharing in the presence of retailer's risk aversion and altruism

Huang

2023

Int Trans Operational Res

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Manufacturer encroachment in a platform supply chain: An analysis of synergy effect, dysergy effect, and mutual exclusivity effect

Chang,

Mi,

Wang

et al. 2024

Manage Decis Econ

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The prosperity of internet sales is stimulating a phenomenal growth of retail platforms and manufacturer encroachment. Encroachment spawns channel competition, potentially threatening the platform's profit, which in turn induces a series of countermeasures by the platform. Motivated by this trend, we develop a game‐theoretical model to explore the strategic and tactical interactions between a manufacturer and a platform, in which the manufacturer determines encroachment strategy and quality differentiation tactic, and the platform determines sales mode strategy and information sharing tactic. We find that the manufacturer is profitable and the platform is damaged from encroachment. Furthermore, the manufacturer's quality differentiation tactic can propel the platform to select reselling that indirectly enhances post‐encroachment profitability. In contrast, sales mode and information sharing can be mono or jointly utilized by the platform to counter encroachment. Significantly, we provide a novel inspection method to systematically analyze the cumulative performance of the platform's two countermeasures by introducing the synergy effect, dysergy effect, and mutual exclusivity effect. Interestingly, we highlight that the performance of mono‐countermeasures may be even more effective than that of combined countermeasures to mitigate the platform's loss caused by encroachment. This finding enriches not only the analytic understanding of received wisdom about whether more countermeasures can invariably hold competition edges but also provides useful managerial guidelines for strategic interaction research. Moreover, the manufacturer's increased encroachment capabilities may promote the platform to shift from reselling to agency selling, which reveals that manufacturer encroachment may be a critical factor in the popularity of agency selling.

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