The impact of vertical shareholding on platform’s information sharing decisions in virtual product supply chains

Information sharing between downstream distribution platforms and upstream virtual product developers is a key coordination mechanism in the virtual product supply chain (VPSC). While previous studies have examined how vertical shareholding affects stakeholders’ decision-making, demand information sharing among VPSC members within a vertical-shareholding structure remains underexplored, which raises the question of how a distribution platform shares the demand information in a vertical-shareholding VPSC. To address this gap, this study investigates the impact of vertical shareholding on information sharing in a VPSC. We develop a two-tier VPSC model with a developer and a distribution platform (holding superior demand information), and examine the demand information sharing strategies under different shareholding structures: (i) no shareholding ( \\({NS}\\) ), (ii) platform shareholding ( \\({PS}\\) ) and (iii) developer shareholding ( \\({DS}\\) ). Our analyses reveal that, first, under no shareholding and \\({DS}\\) , the platform voluntarily shares demand information when the price sensitivity of demand is low, regardless of the developer’s shareholding ratio. However, under \\({PS}\\) scenario, the incentive to share demand information depends on both the price sensitivity of demand and the platform’s shareholding ratio. Specifically, when demand is relatively price-sensitive, the platform is more willing to share information when its shareholding ratio is sufficiently high and less willing to share when it is low. Second, both \\({PS}\\) and \\({DS}\\) enhance product quality and platform effort levels regardless of the information-sharing strategy. Third, irrespective of the information sharing strategy, shareholding consistently benefits the platform, whereas the developer gains only when the shareholding ratio remains below a threshold under both \\({PS}\\) and \\({DS}\\) . Finally, we confirm the robustness of our analysis through two extensions that incorporate risk aversion and the Nash game framework.