Information Disclosure Game on Sharing Platforms

Sharing platforms have facilitated the redistribution of underused resources by providing convenient online marketplaces for individual sellers and buyers. However, the sellers on these platforms may not fully disclose the information of their shared commodities, due to strategic behaviors or privacy concerns. Sellers’ strategic information disclosure significantly affects buyers’ user experiences and platforms’ reputation. This paper presents one of the first analytical studies on information disclosure and pricing strategies of competing sellers on a sharing platform. In particular, we propose a three-stage game framework to capture sellers’ strategic behaviors and buyers’ decisions. Although the corresponding optimization problem is non-convex, we are able to completely characterize the complex market equilibria. We demonstrate that full disclosure by all sellers or non-disclosure by all sellers will both lead to intense price competition. We prove that the former all-disclosure case is never an equilibrium even when all sellers have good commodity qualities and low privacy costs, while the latter non-disclosure case can be an equilibrium under which all sellers get zero profit. Interestingly, we also reveal that buyers’ estimation biases encourage information disclosure as they mitigate the competition among sellers.