Impacts of Vertical Information Transparency on an Agricultural Supply Chain

In this paper, we study a vertical agriculture supply chain with one farmer whose decision variable is his agricultural product selling price and one retailer who makes his order quantity decision. We propose a two-stage game model to characterize this vertical relationship. We mainly focus on the impacts of market information and agriculture advice that provided by governments on the system outcomes. Through theoretical analysis, we find that (1) the farmer's profit is maximal if the government provides market information to the farmer and the retailer at the same time; (2) The agricultural advice provided by the government do not necessarily help farmers to increase their income if the investment cost is involved; (3) to maximize the total supply chain profit, the government may choose to provide information only to the retailer.