Cooperation Mode Selection and Information Sharing in a Fresh Produce Supply Chain With Freshness-Keeping Effort

Abstract

ABSTRACT This article considers a fresh produce supply chain where the supplier provides freshness-keeping effort and the e-commerce platform owns private demand information. The supplier can choose to cooperate with the platform in reselling or agency selling mode, and the platform can choose whether to share information. Considering that demand is affected mainly by freshness and price, we model a multistage game and explore the supplier’s cooperation mode choice and the platform’s information sharing strategy. We reveal that the supplier should consider scale economics while investing in freshness-keeping resources. The platform should be cautious in setting the commission fee because she does not always benefit from the increased commission rate. We also show that the platform may benefit or suffer from information sharing, depending on the freshness sensitivity and the cooperation mode choice. As information sharing benefits responsive decision making, we reveal that the supplier may choose agency selling to induce information sharing even at a high commission rate. We also find that the interaction between cooperation mode selection and information sharing may lead to a win–win or lose–lose equilibrium strategy. Specifically, the supplier and the platform may achieve win–win cooperation under agency selling (reselling) at a low (high) commission rate. Then, to improve supply-chain performance, we design incentive contracts to motivate information sharing and adjust the cooperation mode choice. After the strategy adjustment, we find that the supplier may adopt a strategy of high quality with a low price under agency selling.