Retailers' information disclosure strategies with behavior‐based pricing in competitive supply chains

Abstract

AbstractIn this paper, we investigate information disclosure strategies with behavior‐based pricing (BBP) of retailers in a competitive channel with consumers' valuation uncertainty. We analyze the impacts of disclosure strategies (i.e., disclosing by an individual retailer and disclosing by both retailers) with BBP on the pricing decisions and profits of supply chain members. Then, we investigate the effects of the probability of a high valuation on supply chain members. We find that (i) the profits of manufacturers and retailers with BBP and information disclosure are always higher than those with BBP; (ii) the profits of manufacturers and retailers when both retailers implement BBP and use information disclosure are always higher than those when one retailer implements BBP and uses information disclosure; and (iii) the profits of manufacturers and retailers decrease with the probability of a high valuation first and then increase with it when both retailers implement BBP and use information disclosure.