Abstract:

In the context of a growing global focus on quality， luxury goods have evolved to provide consumers not only with functional utility but also with status utility， which reflects social prestige and wealth. However， the true quality of luxury products remains a private piece of information held by companies， leading to an information asymmetry between producers and consumers. This information gap poses a critical challenge for luxury brands： whether to disclose product quality to reduce information asymmetry and build trust with consumers， or to withhold it to maintain the product's exclusivity and mystique. The core research question of this paper is how luxury brands can optimally balance the disclosure of quality information while maintaining their status value in various supply chain structures.To address this problem， a game-theoretic model is built to analyze luxury brands' quality disclosure strategies in both centralized （direct-operated） and decentralized （multi-brand or buyer-operated） supply chain structures. The model assesses how differences in supply chain management affect the firms' willingness to disclose quality information. It also examines the contrast between luxury goods and ordinary products in terms of quality disclosure and explores how the sensitivity of consumers to status utility influences the decision-making process for luxury brands. The problem is approached through several key research methods， including theoretical modeling and comparative analysis. The game theory-based model simulates the behavior of luxury firms under different market conditions， including various levels of consumer status sensitivity， supply chain structures， and competitive environments. It identifies the conditions under which firms will choose to disclose or hide product quality and the resultant effects on pricing， consumer perception， and firm profitability.The main findings of the research are as follows　（a） Luxury brands should selectively disclose quality information to balance the product's perceived excellence with its mystique. The optimal strategy involves revealing quality information only when the product quality exceeds a certain threshold， enhancing consumer trust while preserving exclusivity. （b） Compared to ordinary products， luxury goods have a higher threshold for quality disclosure. This higher threshold reflects the luxury brands' desire to protect the status utility provided by their products. （c） Luxury brands operating in centralized supply chains （e.g.， direct-operated stores） have a higher tendency to disclose quality information than those in decentralized supply chains （e.g.， multi-brand or buyer stores）， as centralized supply chains allow greater control over brand perception and consumer interaction. （d） As consumer sensitivity to status utility increases， luxury brands become more inclined to withhold quality information， even when the disclosure cost is low. However， this selective withholding leads to higher product pricing and enhanced profitability for the brand.

Key words: status goods, intrinsic consumption utility, status utility, quality disclosure, game theory