Platform's preference information sharing in the presence of private label

Abstract

AbstractIn recent years, platforms have launched their private labels based on valuable consumer data and efficient supply chains. At the same time, some platforms share consumers’ preference information to help manufacturers in producing suitable products. In this paper, we consider a scenario where a platform sells its private label product directly and the manufacturer sells its national brand product through the platform. This study mainly investigates the platform's preference‐sharing strategy. We find that a win–win situation between the platform and manufacturer occurs when the proportion taken by the platform is high, information accuracy is low, and adjustment cost is extremely low. Otherwise, a lose–win, win–lose, or lose–lose scenario may arise. Furthermore, when the adjustment cost is extremely high or low, information sharing can be arranged through some payments. Finally, the study demonstrates that sharing preference information can either increase or decrease consumer surplus and social welfare.