The value captured by a value chain as a whole is distributed among the chain’s members through bargaining. Using cooperative game theory, I show how bargaining structure affects the distribution of value among the constituent firms of the value chain. I find that positions in the bargaining structure most conducive to value capture are those where large complementarity gains are realized and split, ideally, among a small number of negotiators. I suggest that the bargaining structure can be shaped through by architecture of the value chain and, in turn, through the architecture of the product, and the action of powerful firms to optimize value capture.
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The value captured by a value chain as a whole is distributed among the chain’s members through bargaining. Using cooperative game theory, I show how bargaining structure affects the distribution of value among the constituent firms of the value chain. I find that positions in the bargaining structure most conducive to value capture are those where large complementarity gains are realized and split, ideally, among a small number of negotiators. I suggest that the bargaining structure can be shap...
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