Analysis of the Bayesian Game between Up-Stream Enterprise's Service Aware and Down-Stream Enterprise's Service Supply in Supply Chain

By analyzing the game between up-stream enterprise's service aware and down-stream enterprise's service supply in supply chain under the condition of asymmetric information, this paper tries to build Bayesian game model between up-stream enterprise's service aware based on cost payment and down-stream enterprise's service supply based on value seeking, which is as similar as the game model between bargaining and auction. The paper also discusses the optimal cost payment decision of up-stream enterprise and the optimal value seeking decision of down-stream enterprise, so as to provide the condition tinder which up-stream enterprise's service aware and down-stream enterprise's service supply are both efficient, the condition under which down-stream enterprise can satisfy up-stream enterprise's service aware but it doesn't exceed expectant service value and doesn't get profit, and the condition under which the lowest service supply of down-stream enterprise can also satisfy up-stream enterprise's service aware. The paper proves that down-stream enterprise's service standard must be appropriately advanced, otherwise it will lead to sunk cost of service supply and more serious service competition, and that certain service aware cost of up-stream enterprise is necessary, but up-stream enterprise must consciously reduce try-and-error cost by means of externality effect, diffusion effect and spilling off effect of service in supply chain.