Abstract: This paper presents the sequential belief revision method to eliminate information asymmetry in supply chains.It is assumed that the retailer has private information about the demand and the supplier only partially knows the retailer's optimal decisions.The supply chain is modeled within a multiphase Bayesian game with observable results.The supplier revises his belief between phases according to Bayesian rule.This paper shows that with the sequential belief revision method,the supplier's belief will converge to the retailer's private information and asymmetric-information game will converge to the symmetric-information game.And numerical studies verify the effect iveness of the method.

Key words: supply chain management, sequential Bayesian analysis, information asymmetry, belief revision