Collaborative Product Development under Information Asymmetry

Abstract : Product design stage is utterly important for successful product development, as up to 90% of the product costs are locked in during the concept and design engineering phases. At these phases, manufacturers of new products actively involve their suppliers to participate in product development. However, academic literature has not given sufficient attention to the link between the early supplier involvement stage and the subsequent mass production stage. The goals of the product developing manufacturer and its suppliers are not necessarily aligned, which can result in serious inefficiencies. Therefore, the objective of this thesis is to resolve the conflict of incentives at the product design stage when a manufacturer of a new product involves a supplier of a key component. This thesis considers three important facets of collaborative product development: (1) multiple alternative designs of the key component, (2) parallel component development by several suppliers, and (3) testing of the key component by the supplier in order to learn its quality. Relying on the methodology of non-cooperative game theory, the thesis provides practical prescriptions on how to mitigate the incentive misalignment in each of the three cases.
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Timofey Shalpegin. Collaborative Product Development under Information Asymmetry. Business administration. HEC, 2015. English. ⟨NNT : 2015EHEC0007⟩. ⟨tel-01546745⟩

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