EXPRESS: Customer-to-Manufacturer: Should a Platform Cooperate with More Manufacturers?

The traditional top-down relationship between manufacturers and consumers has led to persistently high failure rates in new product development. In response, the emerging customer-to-manufacturer (C2M) model leverages online platforms as intermediaries to directly transmit consumer feedback to manufacturers, thereby improving decision-making in product innovation and increasing the likelihood of product success. This paper develops an analytical model to study the strategic adoption of the C2M model in an online marketplace with one platform and two competing manufacturers. We focus on the role of platform information and examine how its trade-offs shape market outcomes. Our analysis shows that the impact of platform information on manufacturers' expected profits is non-monotonic. Moreover, manufacturers' cooperation decisions in C2M depend on the information price and are moderated by the amount of information. For the platform, unexpectedly, involving more manufacturers in C2M cooperation is not always optimal, especially when information is sufficient. We further show that the C2M model benefits the platform and consumers and improves social welfare, while potentially reducing manufacturers' profits. Overall, our results provide managerial and regulatory implications for platform-based C2M practices.