Information Sharing in a Supply Chain with Supplier and Retailer's Partial Information

This paper addresses the vertical information sharing problem in a supply chain which consists of a manufacturer and a retailer.Both of them possess partial information about market.First the manufacturer sets the wholesale price based on his information and then the retailer sets the retail price based on her information and the wholesale price.This problem can be modeled as a three-stage leader-follower game.It is shown that the unique equilibrium of the game is to share no information.Moreover,the supply chain profit in the uncertain environment is larger than that in the certain case.This implies that information sharing cannot improve the efficiency and effectiveness of supply chain if there is no coordinative mechanism on the member's decisions.