Effects of Demand Information Sharing for Suppliers in an Online Marketplace

In this paper, we discuss the study of optimal policies for retail platforms to set information-sharing fees and for duopoly suppliers to respond to online platform’s information sharing offers through a game-theoretic approach. We analyze the results of four sub-games and derive the optimal acceptance/rejection policy principle. Our research indicates that even if the retail platform does not charge any fees for information sharing, it benefits all supply chain members. However, suppliers do not always accept the offer of information sharing as the corresponding fee increases. In addition, the information asymmetry problem can be addressed when the information cost is not too large. More management insights will be discussed in this paper.