Financing for Newsboys with Information Asymmetry from Small Suppliers

DOI

10.2991/978-94-6239-672-2_52How to use a DOI?

Keywords

capital constraint; newsvendor; bank credit; trade credit; information asymmetry; competition

Abstract

This paper studies the bank credit and trade credit in a supply chain consisting of two asymmetric suppliers and one retailer with uncertainty demand and internal capital information asymmetry. Under two types of credit, we derive the key parameters under Stackelberg equilibrium, and demonstrate that high relative diversion risk level and low internal capital limit the bank credit, which affects the retailer’s order strategy. If the capital-constrained retailer only chooses one credit, retailer with high relative diversion risk level chooses trade credit, retailer with low relative diversion risk level chooses bank credit.under low relative diversion risk level, retailer with low internal capital chooses bank credit, while high internal capital retailer’s preference for specific credit depends on risk-free interest rates of two credit. We further demonstrate that the retailer gains more profits from the big supplier in competition and big supplier needs to provide interest rates no higher than the bank’s risk-free rate to win competition with small supplier. The value of small supplier competition to retailer decreases with the small supplier’s production cost and bank’s risk-free interest rate, and the retailer with low internal capital can gain more value of competition than the retailer with high internal capital.

Copyright

© 2026 The Author(s)

Open Access

Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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TY  - CONF
AU  - Jiahao Li
AU  - Quansheng Lei
PY  - 2026
DA  - 2026/05/12
TI  - Financing for Newsboys with Information Asymmetry from Small Suppliers
BT  - Proceedings of the 2026 3rd International Conference on Applied Economics, Management Science and Social Development (AEMSS 2026)
PB  - Atlantis Press
SP  - 551
EP  - 559
SN  - 2352-5428
UR  - https://doi.org/10.2991/978-94-6239-672-2_52
DO  - 10.2991/978-94-6239-672-2_52
ID  - Li2026
ER  -