Game analysis of product-service integration
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hdl:2099/16339
Tipus de documentArticle
Data publicació2014-12
EditorOmniaScience
Condicions d'accésAccés obert
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Reconeixement-NoComercial 3.0 Espanya
Abstract
Purpose: This paper aims at defining the value creation mechanism and income distribution
strategies of product-service integration in order to promote product-service integration of a
firm.
Design/methodology/approach: This paper conducts researches quantitatively on the
coordination mechanism of product-service integration by using game theory, and uses the
methods of Shapley value and Equal growth rate to further discuss income distribution
strategies of product-service integration.
Findings: Product-service integration increases the total income of a firm and the added value
of the income δπ decreases as the unit price demand variation coefficient of products and
services E increases, while decreases as the marginal cost of products βP increases, decreases as
the marginal cost of services βS increases. Moreover, th e findings suggest that both income
distribution strategies of product-service integration based on Shapley value method and Equal
growth rate method can make the product department and service department of a firm winwin
and realize the Pareto improvement. The choice of what kind of distribution strategy to
coordinate the actions between departments depends on the department playing dominant role
in the firm. Generally speaking, for a firm at the center of market, when the product
department is the main contributor to firm income, the service department will choose the
income distribution strategy of product-service integration based on Shapley value method;
when the service department is the main contributor to firm income, the service departmentwill choose the income distribution strategy of product-service integration based on Equal
growth rate method.
Research limitations/implications: This paper makes some strict assumptions such as
complete information, risk neutral, linear cost function and so on and the discussion is limited
to the simple relationship between product department and service department.
Practical implications: Product-service integration enables a firm to improve its total income.
A firm should take appropriate income distribution strategies in order to promote the its
product-service integration.
Originality/value: This paper introduces game theory into the research of product-service
integration for the first time and it has reached some valuable conclusions, which has opened
up a new field of study in the product-service area.
CitacióZhong, Heping. Game analysis of product-service integration. "Journal of Industrial Engineering and Management", Desembre 2014, vol. 7, núm. 5, p. 1447-1467.
Dipòsit legalB-28744-2008
ISSN2013-0953
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