Selling mode choice and information sharing in an online tourism supply chain under channel competition

This paper examines the selling mode choice and information sharing in an online tourism supply chain with an online travel platform (OTP) that holds private demand information and a tourism service provider under demand uncertainty. By developing a game-theoretic model, we examine the OTP’s information sharing incentive under different selling modes (i.e. agency mode, reselling mode or hybrid mode), then study the OTP’s selling mode preference. Our analysis shows that the OTP may share information even if the double marginalization of information sharing exists under the hybrid mode. The OTP’s selling mode choice changes in response to the channel competition intensity and the commission rate, and is also critically affected by the demand fluctuation and forecast accuracy under certain conditions. In particular, although the channel competition is intense under the hybrid mode, the OTP may choose the hybrid mode rather than the agency/reselling mode without channel competition.