Enabling Service Networks Through Contribution-Based Value Distribution

Products increasingly turn into services. A prime example for this trend is the software industry. Specialized vendors leverage their core competencies in service value networks that offer joint complex services to customers. Such service value networks are in their infancy, yet both academics and practitioners lack approaches to formalize and economically analyze them. Our objective is to reward service providers not only for their inclusion in a particular service rendered, but also for their mere presence in the network. Purpose of such a scheme is to incentivize vendors to join the network and to enforce certain network characteristics from an operator’s point of view. To this end, we introduce a metric to express the contribution of service providers to the whole network – the power ratio. We conduct a simulation to study the evolvement of service value networks if vendors maximize their utility based on their power ratio