Abstract: In this article, the interactive decisions between a manufacturer and a e-retailer in a platform-selling mode when consumers are heterogeneous and have private information is investigated. The manufacturer publishes his information including price and delivery time, etc. through the e-retailer's platforms and sell products. The e-retailer provides his platform only and charges a percentage fee. Through a two-stage Stackelberg model, how the manufacturer designs the incentive contract and the e-retailer charges the percentage is analyzed. The effects of different parameters (private information and cost structure) on the optimal decisions and the performance of each party and the whole chain with the aid of numerical examinations are explored.

Key words: platform-selling, heterogeneous market, incentive contract, revenue sharing