Analysis of interorganizational information sharing

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Abstract
Recent years have observed a number of interorganization information systems and electronic data interchanges through which multiple organizations share information. This article studies the incentives to share information when two or more companies are involved in a supplier‐buyer relationship. We propose two models through which we pursue the question: What type of information will be shared? In the first model, we study the incentives for a production company to share its queue information with its customers. The release of queue information has a trade‐off between loss of profits and efficient flow control, but we show that the supplier will share information under certain regularity conditions. The second model studies the incentive for a supplier to share price information with its buyer. As the buyer makes its quantity decision based on the price information fed by the supplier, the latter has to choose between keeping the communication channel alive for good news and benefiting from the buyer's uninformed purchase decisions. We show that, in most practical situations, the supplier will not voluntarily share its price information.