Information transmit strategy of e-commerce platform with financially constrained supplier

Abstract

A signaling game model is constructed in the framework of a supply chain system consisting of a financially constrained supplier and an e-commerce platform acting as marketplace and a creditor simultaneously. The primary concern of this work is to investigate how the e-commerce platform, which has superior information about market demand, indirectly communicates this information to the financially constrained supplier through its marketing efforts. Under both separating and pooling equilibria, the decisions and profits of each member of the supply chain are firstly considered. Furthermore, using an “intuitive criterion”, the e-commerce platform’s dominant strategy and its influencing factors are analyzed. The results show that when there is a significant difference in the marginal marketing costs, the platform tends to choose the separating equilibrium. When the difference in marginal marketing costs is relatively slight, the e-commerce platform’s dominant strategy depends on the capital of the supplier and the level of market demand fluctuations. Specifically, the e-commerce platform will select the pooling equilibrium when market demand fluctuations are minimal, but the platform will select the separating equilibrium when market demand fluctuations are substantially large. If the supplier’s capital is increased within a certain range, the e-commerce platform is more motivated to select the pooling equilibrium. In addition, the platform usage fee ratio, the platform loan interest rate and the supplier’s prior beliefs are important factors influencing the platform’s decision.