Information disclosure structure in supply chains with rental service platforms in the blockchain technology era

Abstract In platform operations for rental services, product information disclosure (supported by the blockchain technology) is critical to attract customers. By building a stylized duopoly basic analytical model, we conduct a game-theoretic analysis to explore the product information disclosure game between two rental service platforms. We derive the optimal level of product information disclosure and identify the theoretical conditions in which it is optimal to disclose or not to disclose information, which actually means two different types of supply chains. Under the basic model with the two competing platforms scenario, we uncover that from each platform's perspective, there exists a critical threshold on the proportion of information sensitive consumers in the market with which the platform can decide whether it is optimal to disclose product information or not. If the information auditing cost is sufficiently small, it is optimal for the platform to disclose the product information as much as possible. We find that when the product's rental service profit margin increases, the likelihood that both competing platforms will disclose information (including full information) for their products is higher. We also explore the impacts brought by product information disclosure on consumer surplus and seller benefits, and discuss the roles played by the blockchain technology. To check robustness of the results as well as to examine different supply chain configurations, we extend the analysis to the cases when (i) the platforms are risk averse in decision making, (ii) rather than selling the product, the seller (owner of the product to be shared) consigns the product to the platform and shares a revenue, (iii) there is a common rental service platform which receives and provides rental services for two substitutable products. We find that the core qualitative managerial insights remain valid in the basic and all the extended models. Managerial implications are discussed.