Abstract: A salient feature of retailing is the uncertainty of consumers’ preference. In this paper, we develop a theoretic game model involving an incumbent manufacturer, an intruding manufacturer and a retailer with asymmetric preference information, and explore the impact of market encroachment on preference disclosure strategy. The results show that when a product market is partially covered, disclosing consumer preference will lead to higher retail prices of the product, and the upward or downward movement of the product demand depends on the value-transferring effect and the market-segmenting effect. In the absence of market encroachment, the retailer always prefers to disclose consumers’ preference, and when the market is partially covered, the disclosing motivations of both the incumbent manufacturer and the retailer are aligned. Under market encroachment, the disclosure motivations of the three parties are misaligned; when the market is partially covered, the incumbent manufacturer prefers to disclose consumers’ preference, while the market is fully covered, all the three parties may have motivations for disclosure. Market encroachment can facilitate the disclosure of consumers’ preference information, but disclosing consumers’ preference does not necessarily increase consumers’ welfare.

Key words: consumers’ preference, market encroachment, information disclosure, consumer surplus