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Collaborate or Compete: Examining Manufacturers' Replacement Strategies for a Substance of Concern

机译:协作或竞争:检查制造商的替换策略以备关注

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The recent proliferation of media reports on substances of concern has increased consumer fears, sparked scientific debate, and highlighted the need for stronger chemical regulations. When a substance of concern is identified (e.g., bisphenol-A (BPA) in reusable water bottles), manufacturers face difficult trade-offs in deciding whether to proactively replace the substance in their products or to defer replacement and wait to see if regulation occurs. In this study, we examine when opportunities exist for manufacturers to avoid competitively replacing (i.e., making their replacement decisions on their own), and instead, collaborate to replace a substance of concern. We model a vertically differentiated market consisting of a high-end manufacturer and a low-end manufacturer, both of whom sell a product that contains a substance of concern. Our analysis investigates how market dynamics (competition and consumer preferences) and external factors (replacement costs and regulatory uncertainty) influence manufacturers' collaboration, replacement, and pricing decisions. We find that when the manufacturers do not collaborate, the high-end manufacturer can use the presence of a substance of concern to dominate the market by capturing more demand and often charging a higher price for his product than the low-end manufacturer. Collaboration is possible when there is either a shared fixed cost savings for both manufacturers or an opportunity for the low-end manufacturer to benefit his competitive position by motivating the high-end manufacturer to collaborate. From a consumer perspective, although collaboration reduces consumer exposure to the substance of concern, it can decrease consumer surplus when the replacement substance is very expensive.
机译:近期有关关注物质的媒体报道激增了消费者的担忧,引发了科学辩论,并强调了对更严格的化学法规的需求。当识别出令人关注的物质时(例如,可重复使用的水瓶中的双酚A(BPA)),制造商在决定是主动替换其产品中的物质还是推迟替换并等待查看是否发生监管时将面临艰难的权衡。 。在这项研究中,我们研究了制造商何时有机会避免竞争性更换(即自行做出更换决定),而是合作更换关注的物质。我们对由高端制造商和低端制造商组成的垂直差异化市场进行建模,这两家公司都出售包含令人关注的物质的产品。我们的分析调查了市场动态(竞争和消费者偏好)和外部因素(更换成本和监管不确定性)如何影响制造商的协作,更换和定价决策。我们发现,当制造商不合作时,高端制造商可以通过捕获更多需求,并经常向其产品收取比低端制造商更高的价格,从而使用一种关注的物质来占领市场。如果两个制造商可以节省共同的固定成本,或者低端制造商有机会通过激励高端制造商进行协作来从竞争优势中受益,则可以进行协作。从消费者的角度来看,尽管合作减少了消费者对所关注物质的接触,但是当替代物质非常昂贵时,合作可以减少消费者剩余。

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