Production and Operations Management 2026
Information sharing and manufacturer rebate competition
Abstract
We investigate the incentive for a retailer to share private demand information with two rebate-offering manufacturers who sell substitutable products through the retailer. We show that the retailer’s incentive to share information depends on the proportion of rebate-sensitive consumers, the competition intensity, and whether the retailer can charge a side payment for sharing the information. When the retailer cannot charge a side payment, we show that he will not voluntarily share information with a monopolistic manufacturer, but he may do so with none, one or both of the manufacturers when there is competition. Interestingly, we find that more intense competition or a smaller proportion of rebate-sensitive consumers may benefit a manufacturer if it induces the retailer to share information with her. When the retailer can charge a side payment, we consider the two cases when he either contracts concurrently or sequentially with the manufacturers for sharing the information. We show that the retailer always prefers concurrent contracting, which induces the system-optimal information sharing decision, over sequential contracting.
- DOI
- 10.1177/10591478261451661
- Sources
- openalex