Interorganizational Supply Chains: a Game-theoretic Approach

In this paper, we analyze negotiations of investment shares in interorganizational supply chains. To formulate the research issue more precisely, we develop a taxonomy of enterprise networks in general. We propose an investment sharing model that makes use of Shapley values as indicators of relative negotiation power in a network. It turns out that a focal buyer (supplier) in a supply chain can reduce investment shares and by that increase profits from the network if the number of non-focal suppliers (buyers) increases. However, this effect is connected with distortions of investment incentives and makes investment decisions difficult to implement. In the presence of additional coordination costs to support a certain supplier (buyer) base, an optimal number of suppliers (buyers) exists. As a large part of investments for interorganizational supply chains often concerns information and communication systems and technologies, these results are particularly important in the field of information management.