Strategic evolution in manufacturer–supplier collaboration: A game-theoretic exploration of product customization dynamics

Abstract

Amid rising demand for personalized products, manufacturers are forming collaborative bonds with suppliers, driven by revenue and cost-sharing arrangements. This study presents an evolutionary game model examining collaboration nuances and analyzes the impact of customization, revenue, and cost-sharing ratios. Findings reveal customization's bidirectional effect on collaboration and a distinctive relationship between revenue-sharing and collaboration probability. Increased cost-sharing ratios deter manufacturers from collaboration, favoring revenue-sharing mechanisms to incentivize supplier participation. The study highlights revenue-sharing's efficacy in promoting collaboration between manufacturers and suppliers to enhance product competitiveness.