HU Yihong, Lecturer in the Department of Management Science and Engineering, SEM, is the First Author of a collaborative paper entitled “Information Sharing and Personalised Pricing in Online Platforms” with doctoral student QU Shengnan. The paper has been accepted and published online in the leading international operations management journal, Production and Operations Management.

Journal: Production and Operations Management

Authors: HU Yihong, School of Economics and Management, Tongji University

LI Guo, School of Management and Economics, Beijing Institute of technology

LIU Mengqi, Business School of Hunan University

QU Shengnan, School of Economics and Management, Tongji University

Keywords: Information sharing, customer profiling, personalized pricing, big data, online platforms

Core content of the research

With the advent of big data technology, an online platform can easily collect customer information to engage in price discrimination and generate additional profits. Sharing customer information with a third-party seller increases the platform’s commission and information revenue, but the seller’s personalized pricing using customer information intensifies price competition, which may damage the profitability of the platform’s own product. Whether to share information remains an unresolved strategic decision for the platform.

The research uses a game-theoretic model to characterize the interplay between information sharing by the platform and the pricing strategies of two firms. The research studies four basic scenarios in which the two firms adopt either a uniform or a personalized pricing policy. In equilibrium, the seller does not always have incentives to acquire information and the platform is not always willing to share information. Interestingly, with different combinations of the commission rate and the new consumer ratio, the equilibrium of the overall system has four possible outcomes where the information may not be used for price discrimination. With a relatively high commission rate and a low new consumer ratio, the platform no longer pursues demand for its own product and allows the seller to occupy the entire market, leading to the lowest consumer surplus and social welfare. Finally, the research shows that when the commission rate is relatively high, prohibiting information sharing increases consumer surplus and social welfare, confirming the need for regulation. These results could provide useful guidelines for platform managers and regulators to better design information sharing and price discrimination policies.

Research Experience Sharing

Whether and how platforms should carry out customer information sharing, and how the government should regulate and govern platform behavior, are not the only key challenges that need to be solved for the sustainable development of platform enterprises, but also the focus and difficulty of government and social concern. They are of great significance for promoting high-quality development of China’s platform economy. The paper focuses on the practical difficulties in the platform economy, constructs theoretical models for research, and provides policy recommendations. This research was inspired by actual news hotspot and took over four years from constructs designing, writing, to submission and reception. The key factor for publishing papers is perseverance.

Faculty Profile

 HU Yihong

TONGJI_SEM

PhD, Lecturer and Master Tutor at the School of Economics and Management, Tongji University. She has published papers in journals such as European Journal of Operations Research, Annals of Operations Research, Asian Pacific Journal of Operations Research, and Service Science. She has also led projects funded by the National Natural Science Foundation and the Ministry of Education. She has hosted NSFC program and programs of Ministry of Education and is sponsored by Shanghai Pujiang Talent Program.

Research Field: Operational Management under Platform Economy and Emerging Retail Models