Information sharing in platform supply chains under manufacturer competition and cap-and-trade

With the rapid advancement of e-commerce platforms, a large amount of consumer demand data has been accumulated, and it has become a widespread practice to share demand information with upstream manufacturers. However, the existing literature has yet to investigate online platforms’ information sharing strategy when competing manufacturers are involved, particularly within a cap-and-trade regulatory framework. In our paper, we develop a game-theoretical model with two competing manufacturers, each offering substitute products through an online platform and subject to carbon emission regulations. The platform can strategically choose from three information sharing strategies: full, partial, or non-information sharing. Our study shows that, under relatively subdued carbon prices, manufacturers exhibit a preference for the platform to share demand information with their competitors rather than with themselves. Furthermore, the practice of information sharing consistently enhances environmental outcomes, with greater levels of information sharing yielding progressively more substantial benefits. Our research contributes to the production literature by shedding light on how the regulatory policy and competitive dynamics influence information sharing strategies, investment in emissions reduction, and the overall efficiency of production processes.