133 / 2024-04-21 17:59:16

Prosocial demand information sharing in a triadic supply chain with social preferences

Behavioural OR, information sharing, corporate social responsibility (CSR), trust, fairness concerns

We study a triadic supply chain with a retailer and two complementary suppliers. The retailer is close to the market and can privately acquire the market segmentation information, i.e., the proportion of prosocial consumers in the market, while the suppliers only know its distribution. The retailer reports the demand information of prosocial customers to the suppliers publicly, and the suppliers independently decide their own CSR investments to expand prosocial demand in the market under the positive externality of CSR investments. We consider supply chain members' social preferences, including the retailer's lying aversion behavior for the possible manipulation of information shared with suppliers, the suppliers' trust preferences towards the retailer's information sharing, as well as the suppliers' peer-induced fairness concerns caused by the possible free-riding given CSR investments' positive externality characteristics. The results show that: (1) Under full rationality, suppliers' CSR investments are independent of the retailer's report and the equilibrium is uninformative. (2) However, the existence of social preferences can facilitate the effective sharing of prosocial demand information in the supply chain, and enhance suppliers' CSR investments, leading to a win-win-win condition for supply chain members as well as prosocial customers. (3) The critical factors in achieving this condition are the matching between the retailer's lying aversion degree and the suppliers' trust levels, and the alignment between suppliers' trust levels towards the retailer's report. (4) Furthermore, when the retailer is not credible with a low degree of lying aversion, suppliers' peer-induced fairness can alleviate the negative effect of mismatch on their own profits, and improve the overall profit of the supply chain.