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Quality and Contract Design for Platform Brands under Two-sided Information Asymmetry
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DOI：10.1016/j.ijpe.2026.110056.png)
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Abstract
En 中文
E-commerce platforms increasingly adopt store-brand goods to strengthen consumer trust, but face two-sided information asymmetry: platforms lack consumer quality preference data, and consumers struggle to evaluate the quality of new products. To address this, e-commerce platforms and consumers rely on offline franchise stores for information acquisition and product trials for higher information transparency. However, how to incentivize the offline franchise to costly acquire consumer information and design contracts that enable information screening remains a challenge for e-commerce platforms. Following the principal-agent theory, we develop a screening model to examine a platform’s optimal contract design that coordinates product quality, information acquisition, and channel allocation under two-sided information asymmetry. Inspired by real-world practices, the platform can offer a menu of two-part tariff contracts to screen franchise stores’ private information regarding consumer preferences. Three main findings emerge. First, the platform is more likely to incentivize information acquisition when consumers are more enthusiastic about offline trials or hold less biased quality perceptions. In such cases, providing a menu of two contracts—each specifying distinct order quantities and transfer payments—is optimal. Second, offering higher product quality encourages information acquisition and enables dual-channel sales. This suggests that the platform should take a systematic approach by jointly coordinating the quality design, information acquisition, and contract formulation. Third, information transparency has nuanced effects: while the transparency of consumer preference information can enhance quality, sales quantity, and consumer surplus, greater transparency of product quality raises quality and demand but may hurt consumers due to rising prices.
Keywords:
Information asymmetry
Two-part tariff contracts
Information acquisition
Quality design
Channel allocation
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