Effects of information superiority and green optimism on green supply chains under different power structures

This paper examines the impact of information superiority, green optimism, and power structures on the decision making and performance of a green supply chain (GSC) comprised of a manufacturer and a retailer, either of which can be better informed than the other of consumers' green preference (CGP) and/or be the leader of the GSC. Using game theory and ex-post voluntary disclosure modeling, we derive optimal decisions regarding green efforts, wholesale and retail prices, and publicity levels. We also explicitly characterize the conditions under which it is more profitable for the more-informed party to disclose CGP information. We recognize that information superiority may not necessarily benefit the more-informed party, depending on the less-informed party's green optimistic bias and power structure. We further show that hidden superiority can improve environmental benefits and consumer surplus but is detrimental to the less-informed party. The environment and consumers may benefit from the manufacturer's dominance and an increase in CGP. However, the more-informed party also tends to hide information when CGP increases. We also demonstrate that revenue-sharing and bilateral cost-sharing (RSCS), and two-part tariff (TPT) contracts can effectively coordinate manufacturer-led and retailer-led GSCs, respectively. These contracts can lead to Pareto improvement in economic, environmental, and social benefits under hidden superiority. Our findings have important implications for GSC decision making and suggest practical solutions for coordination in both manufacturer-led and retailer-led GSCs.