When a weak brand firm outsources its product from a strong brand firm, the weak brand firm can show this relationship to promote its product, which is referred to as brand spillover. At the same time, the platform can provide information that can alleviate consumers’ uncertainty about their preference for the product. We build a game-theoretic model to study the information revelation and brand spillover strategies in the context where an e-commerce platform sells products of two brands: weak brand firm and strong brand firm’s products. The weak brand firm outsources its product’s manufacturing to the strong brand firm. The equilibrium analysis shows that the weak brand firm always prefers to use brand spillover and the platform prefers to reveal preference information when the ratio of the two products’ cost-quality efficiencies is low.

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Information Revelation Decision Considering Brand Spillover

  • Sheng Jin,
  • Hui Yang,
  • Kui Song,
  • Ying Li

摘要

When a weak brand firm outsources its product from a strong brand firm, the weak brand firm can show this relationship to promote its product, which is referred to as brand spillover. At the same time, the platform can provide information that can alleviate consumers’ uncertainty about their preference for the product. We build a game-theoretic model to study the information revelation and brand spillover strategies in the context where an e-commerce platform sells products of two brands: weak brand firm and strong brand firm’s products. The weak brand firm outsources its product’s manufacturing to the strong brand firm. The equilibrium analysis shows that the weak brand firm always prefers to use brand spillover and the platform prefers to reveal preference information when the ratio of the two products’ cost-quality efficiencies is low.