Information sharing and leakage in the two-echelon supply chain

We consider ex post demand information sharing and leakage in a two-echelon supply chain consisting of one supplier two retailers competing quantities. The incumbent retailer has an advantage to acquire about the market at cost. If he invests acquisition, privately acquires signal demand. examine incumbent’s incentive acquisition sharing, upstream supplier’s strategy. confirm that decisions depend on whether is observable. When it observable, fully shares his private signals even though shared high may hurt him. However, when unobservable, can share favorable (low signal) withhold unfavorable (high signal). Moreover, we also find will always leak entrant no matter what she acquires. In addition, demonstrate under strategy, benefit whole retail competition intensity not very large.