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Yuhui Li
School of Management and Economics, University of Electronic Science and Technology of China, Chengdu 610054, China

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Journal article
Published: 18 November 2017 in Sustainability
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This study focuses on how an upstream supplier signals the private information of its product quality with corporate social responsibility (CSR) choices to a downstream retailer and uninformed consumers in the final market. We build a signaling model to: capture the strategic interactions among the supplier, the retailer, and the final consumers in the supply chain; characterize completely the set of all separating perfect Bayesian equilibriums (PBEs); and finally, select a unique equilibrium that satisfies the intuitive criterion for exploring some comparative statics. The equilibrium results show that under some technical conditions: (1) a set of moderate levels of CSR conduct signal the upstream supplier’s high quality in the sense of separating PBEs; (2) the unique separating PBE satisfying the intuitive criterion is the one with the lowest CSR level that separates a high-quality supplier from a low-quality supplier; (3) the lowest CSR level decreases in the proportion of informed consumers and the low-quality supplier’s marginal CSR cost, but is independent of the high-quality supplier’s marginal CSR cost; (4) the profits of the high-quality supplier increase in proportion to the number of informed consumers and the low-quality supplier’s marginal cost CSR, but decrease in proportion to the high-quality supplier’s marginal CSR cost. Managerial insights are also discussed.

ACS Style

Yuhui Li; Debing Ni; Zhuang Xiao; Xiaowo Tang. Signaling Product Quality Information in Supply Chains via Corporate Social Responsibility Choices. Sustainability 2017, 9, 2113 .

AMA Style

Yuhui Li, Debing Ni, Zhuang Xiao, Xiaowo Tang. Signaling Product Quality Information in Supply Chains via Corporate Social Responsibility Choices. Sustainability. 2017; 9 (11):2113.

Chicago/Turabian Style

Yuhui Li; Debing Ni; Zhuang Xiao; Xiaowo Tang. 2017. "Signaling Product Quality Information in Supply Chains via Corporate Social Responsibility Choices." Sustainability 9, no. 11: 2113.