Information sharing and carbon reduction strategies with extreme weather in the platform economy

Abstract

Extreme weather, cap-and-trade policy, and demand information asymmetry between firms and e-commerce platforms have huge impacts on their operation strategies. In these contexts, platforms face the challenge of whether sharing demand information and firms face the challenge of determining optimal pricing and carbon reduction strategies. To address these challenges, our paper develops four theoretical models and presents some insights. The main results imply that in the case of low actual demand potential, platforms should share demand information with firms. However, in the case of high actual demand potential, platforms' information sharing strategies will be affected by the carbon-trade price and the difference between the high and low actual demand potential. Moreover, the results also show that extreme weather will have a complicated impact on the optimal demand information sharing strategy. It is interesting that non-disclosure of information in some cases benefits the environment. Main results are still valid when considering extreme weather causes a rise in product carbon emission and firms selling two differentiated products. Besides, we find that platforms' choice to share information is always beneficial to firms in the absence of extreme weather, however, this result cannot hold under extreme weather.