Abstract
Many online retailers who initially work as pure resellers are opening their platforms and allowing suppliers to sell through the reselling channel and the marketplace simultaneously (i.e., hybrid selling). Compared with upstream suppliers, these platform-based retailers usually have information-gathering advantages about demands. This paper develops a theoretical model to study the interaction between the platform retailer’s information sharing and the supplier’s hybrid selling choice. Our results show that the substitutability between the marketplace and the reselling channel plays a critical role in the retailer’s information sharing choice. We find that the retailer prefers to share the demand information with the supplier only when the channel substitutability is relatively medium. The intuition is that, when the supplier involves in hybrid selling, demand information sharing shifts power upstream and enhances the supplier's pricing flexibility in the marketplace channel. The price complementarity mitigates the negative double marginalization effect in the reselling channel indirectly.
Published Version
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