Abstract:

This study’s primary aim is to investigate the interaction of Corporate Social Responsibility（CSR） strategies in a supply chain with asymmetric quality information from the perspective of strategic CSR. A supply chain consisting of an upstream manufacturer， a downstream retailer and final consumers with CSR-preference is considered. It is assumed that the product made by the manufacturer has two different quality levels： high and low， and the manufacturer privately owns the information on the quality level. Under this quality information asymmetry， the manufacturer and the retailer strategically invest in CSR sequentially before product trading. The manufacturer tries to disclose quality information by its observable CSR strategy with the retailer and consumers， meanwhile， the manufacturer and the retailer try to promote product demand by their CSR strategies， they transact with a wholesale price contract. A signaling model with interaction of CSR strategies in the supply chain is built.The sequence of the game model is as follows. Firstly， the manufacturer chooses a CSR level to its will to disclose quality information. Secondly， after observing the CSR level to form Posterior Bayesian belief on quality， the retailer determines its CSR level. Thirdly， the manufacturer determines its wholesale price according two CSR levels. Fourthly， the retailer determines its order and retail price. Finally， consumers determine whether to purchase according to their Posterior Bayesian belief on quality， two CSR levels and the retail price. With this model， it focuses mainly on the following three questions： （1） What kind of CSR strategy interaction will occur between the manufacturers and the retailer under quality information asymmetry？ （2） Do the CSR behaviors of the manufacturer have a signaling effect that conveying their quality type information under the CSR strategy interaction？ （3） What are the impact of CSR marginal costs and product production costs on their CSR strategies and economic profits？The separating equilibrium results show that（1） strategically complementarity between the manufacturer’s CSR and the retailer’s CSR leads to that the manufacturer’s CSR stimulates the retailer to invest in CSR， which overcomes the lack of CSR motivation in the supply chain， （2） the manufacturers’ moderate CSR level provides a function of signaling high-quality information to the retailer and consumers. When the difference of CSR margin cost between the high-quality and the low-quality manufacturers is sufficiently small， compared to the complete-information case， information asymmetry leads the high-quality manufacturer and the retail to distort their CSR strategy upwards. With the increase of the retailer’ CSR margin cost， the high-quality manufacturer’s CSR level decreases and his profits increase， （3）the CSR incentive function is effective whether the quality information is symmetrical or not， and gets strengthen with the decrease of the retailer’ CSR margin cost. These results reveal the CSR motivation of node enterprises in an information asymmetry supply chain with joint investment in CSR.

Key words: supply chain, strategic interaction of CSR, product quality, asymmetric information, signaling game