A novel profit allocation rule of complex product development networks under the position value

Abstract

A fair and reasonable profit allocation mechanism is the key to ensuring the stability of complex product development networks. Considering the disconnectedness of development networks, this paper takes the Position value to allocate profits. Initially, this paper constructs the profit function of complex product development networks, which serves as the characteristic function in graph cooperative games. Subsequently, a real-world case is presented to demonstrate the profit allocation process using the Position value, allowing for an examination of the relationship between profits and firms’ investments. Moreover, various factors are investigated to assess their influence on the profit allocation result, and a comparison is made between the Position value and the Myerson value. By adjusting the parameters and observing the numerical simulation, the research delves into the impact of key parameters on firms’ profit allocation. The findings indicate that the network position and investment are directly proportional to firms’ allocated profits. Additionally, the synergistic coefficient and benefit coefficient positively moderate firms’ profits, while the cost coefficient of investment negatively moderates them. Notably, the Position value proves to be more suitable for complex product development networks than the Myerson value.