Manufacturer quality information sharing under different channel power structures

Quality information has significant ramifications for supply chain members. This study investigates the quality information sharing problem in a two-level supply chain consisting of a manufacturer with private quality information and a retailer. We develop game models for three different channel power structures: manufacturer-led (MS), vertical Nash (VN), and retailer-led (RS). The results indicate that the manufacturer under all three power structures should share information when the quality reaches a specific threshold. The likelihood of the manufacturer sharing is highest (lowest) under the MS (RS) structure, and falls between the two under the VN structure. The ex ante payoff of the manufacturer always monotonically decreases first and then monotonically increases with the consumer quality preference and the sharing cost. When the sharing cost is high, the manufacturer under the RS structure has a higher ex ante payoff. Conversely, when the sharing cost is low, both the supply chain and consumers prefer the VN structure.