Demand information sharing in a two‐echelon supply chain with a risk‐averse retailer: retail price decision versus retail quantity decision

Abstract We examine the demand information sharing strategies of the risk‐averse retailer in a two‐echelon supply chain. The retailer is privately informed of the demand signal before the selling season. The retailer's risk aversion is described by the utility and mean‐variance method. According to different decision choices of the retailer, we investigate the dynamic game among the supply chain members under the retail price decision and the retail quantity decision. Additionally, the influences of the degree of risk aversion on supply chain members’ equilibrium solutions and ex ante expected utilities are analyzed, and the demand information sharing strategies of the retailer are investigated. Our result shows that under the retail price decision, the retailer is inclined to share the demand signal when the degree of risk aversion surpasses a special threshold and never shares under the retail quantity decision.