Inducing information transparency: The roles of gray market and dual-channel
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Inducing information transparency: The roles of gray market and dual-channel Zhong-Zhong Jiang1,2
· Jinlong Zhao1 · Zelong Yi3
· Yaping Zhao3
© Springer Science+Business Media, LLC, part of Springer Nature 2020
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
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Zelong Yi [email protected] Zhong-Zhong Jiang [email protected] Jinlong Zhao [email protected] Yaping Zhao [email protected]
1
School of Business Administration & Institute of Behavioral and Service Operations Management, Northeastern University, Shenyang 110167, China
2
Key Laboratory of Data Analytics and Optimization for Smart Industry (Northeastern University), Ministry of Education, Shenyang 110189, China
3
Department of Transportation Economics and Logistics Management, College of Economics, Shenzhen University, Shenzhen 518060, China
123
Annals of Operations Research
1 Introduction Gray market, which is also referred to as “parallel importing”, is a form of unauthorized or unlicensed international trade that some importers partake in to capture the customer market. A unique property of gray products is that most of them are luxury goods. Besides, the goods are imported without the express permission of the intellectual property owner. Individuals refer to this as gray market goods, and most trades entail high-priced branded goods such as cell phones, jewelry, watches et al. Note that, the products themselves are not counterfeiting, bootleg, or fake
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