Information Investment and Sharing in a Two-Echelon Supply Chain under Government Subsidy and Consumer Preference for Energy-Saving Products

Abstract EN

This study establishes a two-echelon supply chain with one manufacturer who invests in energy-saving products (ESPs) and one retailer who sells the products and may possess demand-forecast advantage.

Considering government subsidy and consumer preference for ESPs and a random demand, we develop a four-stage Stackelberg game model to research the optimal strategies of the information investment and sharing of the retailer and the energy-saving R&D of the manufacturer.

The results show the following: (1) When incurring a low information investment cost, the retailer is willing to invest in information acquisition techniques, while the retailer agreeing to share market information is related to the government subsidies and the probability of a high demand.

The optimal strategy for the retailer is to share information when the probability of a high demand is less than 50% and the government subsidies for ESPs are high.

Otherwise, the optimal strategy is not to share information.

(2) The manufacturer not always expects the retailer to share information, which depends on the probability of a high demand and manufacturing cost.

Especially, when the probability of a high demand is less than 50%, only a manufacturer incurring high cost will expect.

(3) If the retailer refuses to share the information, the manufacturer can motivate the retailer to change his/her decision by sharing the information investment cost.