Modeling collaboration formation with a game theory approach

While collaborative product development (CPD) is adopted by more and more firms as a business strategy, there is still lack of thorough research on the conditions under which the collaboration is formed. This paper proposes a mathematical model integrating trust, coordination, co-learning, and co-innovation dimensions of CPD. These dimensions, as well as additional parameters such as knowledge investment, absorption capability, efficacy, and complementarity enable the observation of the collaboration behavior under various scenarios. An analysis is conducted with Nash Bargaining approach to investigate the effect of various parameters on the collaboration formation as well as the revenue sharing. The analysis summary presents the optimum strategies for each scenario.