Information sharing and channel selection considering product collaboration

Abstract

Manufacturers’ product advantage and platforms’ information advantage have been reshaping operational modes of multi‐channel platform supply chains. To investigate this reshaping mechanism, this study builds Stackelberg game models composed of a manufacturer and a platform under reselling‐direct and agency‐direct selling scenarios. Four types of order quantity and pricing games involving product collaboration and information sharing are developed to support channel selection and strategy optimization. The study finds that in the agency selling channel, information sharing can achieve a Pareto improvement in profits for both parties only when the substitution rate is low after product collaboration. In this scenario, social welfare is maximized. If the platform sets a higher commission rate, both parties tend to maintain the agency selling channel; otherwise, the platform always prefers the reselling channel. Moreover, information sharing expands the selection space for both parties to retain the agency selling channel. In the reselling channel, a Pareto improvement in profits for both parties requires product collaboration as a prerequisite, and product collaboration can weaken the competitive effect from information sharing. Extending the models to three‐channel scenarios, this study reveals: given the coexistence of the manufacturer's agency channel and the platform's private brand direct channel, the platform will refuse to facilitate the manufacturer's entry into the reselling channel. Furthermore, product collaboration serves as a necessary prerequisite for the manufacturer to achieve profit increases when hybrid channels are unavailable. This study uncovers the interplay mechanism of information sharing strategies considering product collaboration on firms’ operational decisions and sales channel selection.