A Conceptual Model to Overcome Information Asymmetries in Supply Chains

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MAGAZINE №6(89) December 2018



GRIGOREV M.N. - Cand. of Eс. Sc., Associate professor, St. Petersburg State University of Economics (St. Petersburg, Russia)

CATEGORY Analysis in logistics and SCM Supply chain management


Supply chain management is based on the use of rather heterogeneous and uncertain information. The uncertainty of the market information or product gives rise to the asymmetry of information – the circumstances in which some of the participants in the transaction possess the important other participants do not have. This problem was first noted by K. Arrow in 1963.

In 1970 G. Akerlof proposed a mathematical model of the market with asymmetric information. In such a market, the price of goods tends to decline even for goods with perfect quality. There are options for the development of a situation in which such a market disappears completely.

The problem of asymmetric information has since been studied in relation to different markets and products, such as insurance markets, used car models and others, but the problem has been little studied in relation to supply chains.

The presence of various types of uncertainty in supply chains makes it possible to apply the theory of fuzzy sets. Application of the fuzzy set theory allows to combine all kinds of information into a single whole and adequately consider it. To do this, it is necessary to provide information about the functioning of logistics systems in the form of membership functions.

Using the tools of fuzzy set theory, it is possible to develop a conceptual model for overcoming information asymmetry in supply chains between different market participants, which will improve the transparency and reliability of their supply chains.

When modeling the processes of overcoming information asymmetry in supply chains, it is possible both to increase and reduce the number of signs affecting the manageability of supply chains, depending on the complexity of the logistics systems. Due to this, this model can be adapted to a variety of forms of interaction between logistics and trade organizations, regardless of their size and scope of activity.

Thus, this model allows to establish the degree of reliability, transparency and manageability of supply chains between their different participants and to find:

  •  the best ratio of qualitative and quantitative features characterizing certain supply chains between different organizations with the existing information asymmetry between them;
  •  ways to reduce information asymmetry and increase information transparency depending on the values of the indicators that characterize the supply chain and choose the best one.

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