The interplay between e-tailer information sharing and supplier cause marketing

Abstract

Inspired by the increasing cause marketing (CM) practices of business firms, this paper investigates an e-tailer's incentives to share demand information with its supplier who may implement a CM campaign. Two different selling modes, agency selling and reselling, are examined. Although most previous studies suggest that a retailer should withhold its private demand observations to maintain an information advantage over the supplier, we find that CM may be a driving factor which motivates the e-tailer to share demand information with its supplier under certain conditions. Specifically, when the CM implementation cost is small or large, the e-tailer would like to share demand information under agency selling mode while keeping information private under reselling mode. When the CM implementation cost is intermediate, the consumer's prosociality level is high and information uncertainty is small, the e-tailer misleads (incentives) the supplier to implement CM by withholding (sharing) information under the agency selling (reselling) mode; otherwise, the e-tailer prefers to share (withhold) information under the agency selling (reselling) mode.