Channel Encroachment and Information Sharing Strategy: A Game-Theoretic Equilibrium Analysis of Fresh Agricultural Product Supply Chain

Abstract

Fresh agricultural products deteriorate quickly and face volatile demand, which complicates the coordination of pricing, preservation, and information across the supply chain. As omnichannel retailing expands, suppliers increasingly reach consumers directly or through partnership arrangements with the retailers that carry their products, while retailers hold demand information they may withhold. This study examines how a supplier’s channel encroachment decision and a retailer’s information-sharing decision jointly shape supply chain outcomes, and how these interactions depend on decision sequencing and the form of competition. We develop a two-echelon game-theoretic model incorporating preservation effort, stochastic demand, and asymmetric demand information, in which the supplier selects among no encroachment, direct encroachment, and collaborative encroachment, and the retailer decides whether to share its private forecast. Equilibria are derived in closed form by backward induction under both supplier-led and retailer-led timing, and the model is extended from Bertrand price to Cournot quantity competition. Encroachment raises both the wholesale price and the preservation effort, with direct encroachment producing the largest increases. Retailers share information only under collaborative encroachment, and only when competition is intense and the service fee moderate. Sharing is more readily sustained under supplier leadership, whereas retailer leadership enlarges the region of no encroachment. Quantity competition reverses several of these patterns: retailers no longer share, and the ranking of total sales changes. These results guide suppliers in tying channel choice to relative costs, caution retailers against indiscriminate disclosure, and identify the service fee as the pivotal variable for information-governance regulation.