Decision analysis and coordination of two-stage supply chain considering cost information asymmetry of corporate social responsibility

Abstract Information has become an extremely important commodity nowadays. The privatization of corporate social responsibility cost information has a negative impact on the sustainable development of supply chain. Hence, it is important to set up a reasonable coordination mechanism to encourage the supply chain members to reveal the true corporate social responsibility cost information. This paper investigates corporate social responsibility-sensitive supply chain, where a contract supplier sells products through a brand retailer. The contract supplier can invest in corporate social responsibility activities, but its corporate social responsibility cost information is only privately known to him. According the corporate social responsibility cost information revealed by the supplier, the retailer will decide whether to cooperate with him for a long time. Stackelberg game is used to explore the impact of the cost information asymmetry on the decision of supply chain members. The paper compares the decision effects under information asymmetry and symmetry decision, and designs a coordination mechanism for promoting the supplier to reveal the true corporate social responsibility cost information and achieving the supply chain coordination. The results show that the decision-making effect under symmetric information is better than asymmetric information, and the supplier’s profit under the designed mechanism is not lower than that under asymmetric information. Moreover, the designed mechanism can improve the supplier’s commitment to corporate social responsibility and eliminate double marginal effect to a certain extend. This paper provides managerial and practical insights for the enterprise adopting sustainable business models.