How does platform's value-added information service affect brand's selling mode choice? A game-theory analysis on pricing and service decisions

Abstract

In the digital era, data has become a key factor of production. E-commerce platforms leverage their data resources and technology to empower supply chains by providing brands with big data-driven value-added information service (BVI service). This paper considers how the platform's information service affects the brand's selling mode choice in an E-commerce supply chain. This paper develops a dual-channel supply chain Stackelberg game model consisting of a single brand and a single e-commerce platform. By comparing four scenarios involving reselling/agency selling with/without BVI service, we examine how BVI service affects the brand's selling mode choice by reducing deviation and generating cross-channel spillover. The results show that the brand consistently prefers BVI service. It chooses agency selling under weak competition but switches to reselling under intense competition. By leveraging precise demand information to reduce disorderly channel competition, the BVI service induces a competition mitigation effect, making the reselling mode the optimal solution for supply chain coordination under intense competition. Finally, lowering data authorization fees triggers a win-win expansion effect, significantly expanding the win-win region under agency selling; with free authorization, both agency selling and reselling can become win-win equilibrium strategies, identifying that BVI service as a crucial tool for supply chain coordination. This study fills this gap by examining how the platform's BVI service influences the brand's online selling mode choice and the strategic interactions between the platform and the brand, thereby affecting market demand deviation and cross-channel spillover effects.