Abstract: This paper considers a two-stage supply chain consisting of a supplier and two retailers where information is shared between firms.If s assumed that the demand distribution of the products is unknown and the demand information is partially observable.Firms refresh their priors on demand according to the Bayesian rule.As the information pools at the supplier,the supplier occupies more information than the retailers,which may distort the supplier's knowledge of the market demand.We call this phenomenon pooled information effect.This paper presents the definition of pooled information effect and derives the sufficient condition that pooled information effect is to take place.Numerical example shows that under certain conditions,it is well possible that pooled information effect will occur in supply chains.

Key words: supply chain management, pooled information effect, information sharing, bayesian inventory managements