Abstract: Many upstream supplier may sell their products indirectly through various reselling channels, some large resellers is often better informed than the other small resellers of the market demand. It is assumed that the large reseller can observe the true market type privately, before production, while the small reseller knows only the prior distribution of the market type. Since the small reseller does not observe the market demand directly, he may want to use the information revealed from the large reseller's order quantity though the supplier to make his decision on the direct sale quantity. Anticipating the supplier and small reseller's decision, the large reseller may purposely block information dissemination by ordering the same quantity for any market size or reveal the market size truthfully. So in this paper, how information leakage influences the supply chain strategic in the presence of asymmetric information is investigated, with different bargaining power of two retailers, when revenue sharing and wholesale price contract are used, respectively. This issue is discussed though a one supplier-two reseller setting where the supplier may leak the market information learned from order quantity of the large reseller who is better informed of the market size to a small reseller. The market information of large retailer is leaked to its competitor though the supplier thereby affects the supply chain. By analyzing and comparing the features in the process of the two retailers' decision game in two cases, with or without the information leakage, the mechanism of supply chain information leakage under asymmetry information is revealed. Then under the premise of the assumptions that the manufacturer will always leak information, the decision-making model based on the signaling is constructed, to discuss the two retailers' ordering strategies as well as profits under both separating equilibrium and pooling equilibrium. On the basis, the situation in which from the perspective of own interests, the manufacturer takes the initiative to choose whether leak information or not, when information leakage phenomenon may exist, the two retailers' strategies choice is extended. The analysis shows that the manufacturer will always leak information to gain better interest. Therefore when making decisions, retailers should take the manufacturer's such a selfish behavior into account, big retailer's strategies selection are related to the degree of market demand fluctuation: pooling equilibrium performed better with small-fluctuation demand while separating equilibrium performed better with large-fluctuation demand. In particular, when the market demand is low, the optimal order quantity of big retailer distorted downwards, that is to pay a certain "information rent" as the expense to deal with the information leakage.

Key words: asymmetric information, Information sharing, information leakage, rational equilibrium, ordering strategies