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How to Coordinate Value Generation in Service Networks

Author

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  • Benjamin Blau
  • Clemens Dinther
  • Tobias Conte
  • Yongchun Xu
  • Christof Weinhardt

Abstract

The fundamental paradigm shift from traditional value chains to agile service value networks implies new economic and organizational challenges. As coordination mechanisms, auctions have proven to perform quite well in situations where intangible and heterogeneous goods are traded. Nevertheless, traditional approaches in the area of multidimensional combinatorial auctions are not quite suitable to enable the trade of composite services. A flawless service execution and therefore the requester’s valuation highly depends on the accurate sequence of the functional parts of the composition, meaning that in contrary to service bundles, composite services only generate value through a valid order of their components. The authors present an abstract model as a formalization of service value networks. The model comprehends a graph-based mechanism implementation to allocate multidimensional service offers within the network, to impose penalties for non-performance and to determine prices for complex services. The mechanism and the bidding language support various types of QoS attributes and their (semantic) aggregation. It is analytically shown that this variant is incentive compatible with respect to all dimensions of the service offer (quality and price). Based on these results, the authors numerically analyze strategic behavior of participating service providers regarding possible collusion strategies. Copyright Gabler Verlag 2009

Suggested Citation

  • Benjamin Blau & Clemens Dinther & Tobias Conte & Yongchun Xu & Christof Weinhardt, 2009. "How to Coordinate Value Generation in Service Networks," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 1(5), pages 343-356, October.
    • Handle: RePEc:spr:binfse:v:1:y:2009:i:5:p:343-356
    DOI: 10.1007/s12599-009-0070-3
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    References listed on IDEAS

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    3. Collins, J. & Ketter, W. & Gini, M., 2008. "Flexible Decision Support in Dynamic Interorganizational Networks," ERIM Report Series Research in Management ERS-2008-082-LIS, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
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    5. Holger Karl & Dennis Kundisch & Friedhelm Meyer auf der Heide & Heike Wehrheim, 2020. "A Case for a New IT Ecosystem: On-The-Fly Computing," Business & Information Systems Engineering: The International Journal of WIRTSCHAFTSINFORMATIK, Springer;Gesellschaft für Informatik e.V. (GI), vol. 62(6), pages 467-481, December.

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