Company data sharing, product innovation and competitive strategies

With the arrival of big data era, competition among companies has gradually transformed into a competition for data. Data sharing among competitive companies can promote the realization of data value transfer and co-creation, and improve companies' product innovation. Meanwhile data sharing among competitive companies improves the attractiveness of products and intensifies market competition in jointly developed markets. Our study considers two companies with horizontal product differentiation, and develops revenues models under no data sharing, one-way data sharing and two-way data sharing based on the Hotelling model. Our study shows the following: (1) When companies adopt one-way data sharing, the range of value compensation relies on the amount of shared data. (2) When companies adopt two-way data sharing, companies will share data in the absence of fierce market competition, and companies will not share data when the market competition is fierce. We also find: (1) When companies adopt one-way data sharing, the consumer surplus will increase too. The horizontal differentiation of products has a positive impact on the willingness of data sharing. The absorptive capacity of the data receiver has a negative impact on data sharing. (2) When companies adopt two-way data sharing, the willingness to share data decreases with the increase of the market competition. (3) The companies' optimal data sharing strategy depends on horizontal product differentiation, data absorptive capacity and market competition. With a suitable value compensation coefficient, a company's income under one-way data sharing may be greater than that under two-way data sharing.