Pricing of a Three-Stage Supply Chain with a Big Data Company

As Big Data is crucial to the competition and growth of companies, this paper considers a multi-stage supply chain with one Big Data company, multiple manufacturers, and one retailer. Demands of different products are dependent on the price and volume of each other, and such information can be obtained by the Big Data company at a cost. Manufacturers will purchase the demand information from the Big Data company and produce and sell products to the retailer. We intend to examine interactions among these firms. Specifically, various power structures are considered, and the equilibrium pricing decisions are analyzed and expressed explicitly through theoretical study. Effects of parameters under different power structures are explored and compared with each other through both special case studies and numerical experiments. This study enables the derivation of managerial insights related to Big Data that are useful for practical applications. © 2021, The Author(s), under exclusive licence to Springer Nature Switzerland AG.