Abstract:This paper addresses the incentive problems arising from vertical information sharing of demand forecasts in a group-purchasing supply chain,which consists of one group purchasing organization ( GPO) and two complementary goods manufacturers. Each manufacturer who purchases a common component from the GPO,is considered to have imperfect demand information and is allowed to share partial information with the GPO. Through a multistage game model of incomplete information,the supply chain equilibrium is analyzed.Then,an incentive contract for information sharing,provided by the GPO to the manufacturers,is proposed based on revenue sharing. The results indicate that under simple wholesale pricing,information sharing hurts the supply chain by aggravating the negative effect of double marginalization and by impairing the positive effects of complementarity and prediction. As a result,both manufacturers are reluctant to share information with the GPO. However,when the revenue sharing contract is adopted,information sharing can benefit the supply chain by reducing the double marginalization effect,and both manufacturers are willing to share com-plete information with the GPO. As a result,Pareto improvement can be realized for all the members of the supply chain. Due to the setting of information asymmetry between the manufacturers,there exists a systematic loss compared with the optimal profit of the centralized supply chain. Furthermore,the loss increases monotoni-cally with the complementarity of goods and is unimodal with respect to the information accuracy. Finally,a numerical example is presented to illuminate the main conclusions of this paper.