A Horizontal Competition-Cooperation Game of Technological Innovation in an Automobile Cluster Supply Chain

Abstract

The horizontal competition-cooperation game of technological innovation in a two-stage automobile cluster supply chain composed of a duopoly of automobile manufacturers and a single automobile dealer is studied. The four game models are constructed based on the relationship of horizontal competition cooperation between automobile manufacturers and research and development (R&D) mode, and each game model gives the optimal price decision and optimal technical content decision of new products when the automobile manufacturer and automobile dealer maximise their profits. By comparing the equilibrium results of each game model and conducting numerical simulation analysis, we reveal the effects of the competition-cooperation relationship and R&D mode on supply chain decision-making. The results show the following: (1) A fully cooperative innovation strategy can maximise the total profit of automobile manufacturers, but it will reduce the profit of the automobile dealer. (2) When the horizontal competition is not fierce and the consumption preference for technical content is weak, innovation strategy of competition cooperation (competition but cooperative R&D) can enable the automobile dealer to obtain the maximum profit. (3) Market preference for the technological content of automotive products accrues greater potential benefits to the whole supply chain channel.