Strategic Information Sharing of Online Platforms as Resellers or Marketplaces

Information sharing becomes increasingly important in recent years as online platforms gather massive consumer information that is typically invisible by upstream manufacturers and competing sellers/retailers. We study an online platform’s demand information sharing strategy in a distribution channel where a manufacturer distributes products through both platform and seller channels. We consider two different selling structures: the conventional reselling model (in which the platform acts as a reseller) and the agency/marketplace model (in which the platform acts as an agency). We find that for both selling formats, the platform always has incentives to share information with at least one party (either manufacturer or seller or both). The marketplace selling format gives the platform stronger incentives to share information with the seller. With low competition in the reselling model, the platform may not share information with the manufacturer, whereas it always does in the marketplace model. Interestingly, the forecasting accuracy does not structurally change optimal information sharing in the reselling model but induces the platform to share information with both the manufacturer and the retailer when it is high or low in the marketplace model. Our findings provide useful guidelines for an online platform on when and whom to share demand information with.

History: Yuxin Chen served as the senior editor and Zsolt Katona served as associate editor for this article.

Funding: This research was supported in part by the National Natural Science Foundation of China [Grants 71971205, 72188101, 71671173, 72091210/72091215, and 71731010].

Supplemental Material: The online appendices are available at https://doi.org/10.1287/mksc.2022.1397.