Quality disclosure in a dual-channel supply chain with an online dual-purpose platform

Abstract

This study investigates the disclosure strategies for quality information in a dual-channel supply chain comprising a manufacturer and a dual-purpose online platform focusing on both profit and consumer surplus. We elaborate on two disclosure formats: the P-C format, in which the platform discloses quality information, and the M-C format, in which the manufacturer discloses quality information. The results show that firms have the same disclosure motivation when the platform pursues profit maximization because only the agency channel is retained in the supply chain, and firms share profits equally. However, the indistinguishable disclosure incentive for firms exhibits a convex relationship with the consumer surplus concern in the dual-purpose case. In addition, the M-C or P-C format is the optimal disclosure preference for firms, indicating that hitchhiking may not always be the best option. Specifically, the manufacturer (platform) will proactively disclose information in regions where the commission rate is low (high) and the consumer surplus concern is not too high. Firms in these areas have common preferences regarding different disclosure formats. Also, consumers do not necessarily benefit from the increased consumer surplus concern under the P-C format. Finally, the outcomes are robust to the scenarios with a parsimonious dual-purpose platform, ex-post disclosure, quality certification, and imperfect competition market.