Interaction between channel characteristics and quality disclosure

Online retailers can provide more product quality information in different ways with different information technologies (e.g., product simulators and virtual reality) in order to reduce consumers’ uncertainty about the product quality. We suggest that online retailers should combine the influence of online channel characteristics and the quality of product attributes in the information disclosure strategy. We introduce a dynamic model in the environment of a two-echelon supply chain. Product quality and information disclosure are endogenous in this model. Our research shows that if the degree of information disclosure and the cost of disclosure are low, the best choice for the online retailer is to disclose high-quality attribute (searchable attribute or experiential attribute) quality information. Interestingly, if the degree of information disclosure is high, the best choice for the online retailer is to disclose low-quality attribute (searchable attribute or experiential attribute) quality information. In addition, manufacturers’ profits and product quality may present a U-shaped relationship under the equilibrium state.