Year: 2016
Type: article
Abstract: This paper studies firms’ innovation behavior in a supply chain where two firms first invest to reduce component’ cost according to different innovation modes (non-cooperative innovation, sequential innovation, and cooperative innovation) and then decide the prices according to different market powers (Supplier-Stackelberg, Manufacturer-Stackelberg, and Nash). We find that both the supplier and the manufacturer make more innovation efforts and profits under sequential innovation than under non-cooperative innovation when the market power is any one of three structures. Moreover, the firm prefers to invest as the follower in sequential innovation. We also show that the firms are easy to achieve cooperative innovation under symmetrical power market structure than asymmetrical power market structure. By using a concept named innovation-desirability-index that measures a firm’s desire to innovate in the supply chain, we show that it is optimal for a firm in the chain to cooperate with such a firm whose market power is close to his own if the innovation-desirability-index is higher, otherwise with such a firm whose market power is lower to his own.
Authors: Sujuan Wang, Fangfang Liu
Institution: Shanxi University
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: diamond
Award: 供应链环境下基于谈判力的商业模式及合作创新研究
OpenAlex ID: W2296101735