TY - JOUR
T1 - Information disclosure structure in supply chains with rental service platforms in the blockchain technology era
AU - Choi, Tsan Ming
AU - Feng, Lipan
AU - Li, Rong
N1 - Funding Information:
We gratefully acknowledge the support of the National Natural Science Foundation of China ( 71802143 ), the Humanities and Social Sciences Research of the Ministry of Education of China ( 18YJC630260 ).
Publisher Copyright:
© 2019 Elsevier B.V.
PY - 2020/3
Y1 - 2020/3
N2 - In platform operations for rental services, product information disclosure (supported by the blockchain technology) is critical to attract customers. We build a stylized duopoly model to analyze the product-information-disclosure Nash game between two rental service platforms whose products-to-rent are substituble. We derive the equilibrium level of product information disclosure and identify conditions under which the platforms choose to disclose or not to disclose information, which correspond to different types of supply chains. For the basic model, we find that there exists a critical threshold on the information-sensitive consumers which helps each platform decide whether or not to disclose product information. If the information auditing cost is sufficiently small, both platforms should disclose the product information as much as possible. For products with higher profit margin, both platforms are more likely to disclose information. We also explore the impacts of product information disclosure on the consumer surplus and seller benefits, and discuss the roles played by the blockchain technology. To check robustness of the results as well as to examine different supply chain configurations, we extend the analysis to the cases including (i) the platforms are risk averse in decision making, (ii) rather than selling the product, the seller (owner of the product) consigns the product to the platform and shares a revenue, and (iii) rather than two competing platforms, there is a common rental service platform providing service for two substitutable products. We find that the core insights remain valid in all the extended models. Managerial implications are discussed.
AB - In platform operations for rental services, product information disclosure (supported by the blockchain technology) is critical to attract customers. We build a stylized duopoly model to analyze the product-information-disclosure Nash game between two rental service platforms whose products-to-rent are substituble. We derive the equilibrium level of product information disclosure and identify conditions under which the platforms choose to disclose or not to disclose information, which correspond to different types of supply chains. For the basic model, we find that there exists a critical threshold on the information-sensitive consumers which helps each platform decide whether or not to disclose product information. If the information auditing cost is sufficiently small, both platforms should disclose the product information as much as possible. For products with higher profit margin, both platforms are more likely to disclose information. We also explore the impacts of product information disclosure on the consumer surplus and seller benefits, and discuss the roles played by the blockchain technology. To check robustness of the results as well as to examine different supply chain configurations, we extend the analysis to the cases including (i) the platforms are risk averse in decision making, (ii) rather than selling the product, the seller (owner of the product) consigns the product to the platform and shares a revenue, and (iii) rather than two competing platforms, there is a common rental service platform providing service for two substitutable products. We find that the core insights remain valid in all the extended models. Managerial implications are discussed.
KW - Competition
KW - Economics analysis
KW - Multi-products
KW - Product information disclosure game
KW - Rental service platforms
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U2 - 10.1016/j.ijpe.2019.08.008
DO - 10.1016/j.ijpe.2019.08.008
M3 - Article
AN - SCOPUS:85071907815
SN - 0925-5273
VL - 221
JO - International Journal of Production Economics
JF - International Journal of Production Economics
M1 - 107473
ER -