تجزیه و تحلیل اقتصادی به اشتراک گذاری بستر های نرم افزاری
|کد مقاله||سال انتشار||مقاله انگلیسی||ترجمه فارسی||تعداد کلمات|
|28401||2008||23 صفحه PDF||سفارش دهید||13179 کلمه|
Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)
Journal : Journal of the Japanese and International Economies, Volume 22, Issue 2, June 2008, Pages 164–186
We explore the managerial implications and economic consequences of platform sharing under models of horizontal and vertical product differentiation. By using a common platform across different products, firms can save on fixed costs for platform development. At the same time, platform sharing imposes restrictions on firms' ability to differentiate their products, and this reduces their profitability. It might appear that platform sharing across firms makes consumers worse off because firms cooperate in their product development processes to maximize their joint profit. We find, however, that platform sharing across firms benefits consumers in our framework because it intensifies competition in our horizontal differentiation model, and because it increases the quality of the lower-end product in our vertical differentiation model. We also show new channels through which a merger makes consumers worse off in the presence of platform sharing. J. Japanese Int. Economies22 (2) (2008) 164–186.
Product platforms, which are component and subsystem assets shared across a family of products,1 have recently attracted increasing attention in the product development/design literature (see e.g. Meyer and Lehnerd, 1997, Nobeoka and Cusumano, 1997 and Robertson and Ulrich, 1998). Robertson and Ulrich (1998) conceptually articulated the trade-off that firms face when they share a common platform across multiple products. On the one hand, by sharing components and production processes across products, firms can develop differentiated products efficiently. That is, platform sharing reduces product development cost and time because parts and assembly processes developed for one model do not have to be developed and tested for the others. On the other hand, since components and production processes are important factors in determining the nature of products, platform sharing reduces the distinctiveness of products, which is valuable in the marketplace. Given this important trade-off, Robertson and Ulrich proposed the platform-planning process through which firms can achieve an optimal balance of commonality and distinctiveness. Platform sharing has become common in the automobile industry; an automobile platform means the core framework of cars which includes the floorpan, drive train, and axles. An automobile manufacturer often uses a common platform for different products with similar quality levels. For example, Mitsubishi shares a common platform between its Endeavour and Galant, and Honda shares a common platform between its CR-V and Civic.2 A common platform can also be shared across manufacturers. Renault and Nissan have developed a common platform for the Nissan Micra and the Renault Clio, and they plan to reduce the number of platforms they use to 10 in 2010 from the 34 they had in 2000 (see e.g. Tierney et al., 2000 and Bremner et al., 2004). See also Szczesny (2003) for platform sharing between Ford Motor and Mazda. These are examples of platform sharing across horizontally differentiated products within a firm and across firms. An automobile manufacturer can also share a common platform across multiple products with different quality levels. For example, Toyota uses a common platform for its Landcruiser and Lexus LX 470, and Honda uses a common platform for its CR-V and Acura RDX.3 As an example of platform sharing across firms, Porshe and Volkswagen use a common platform for Porshe's Cayenne and Volkswagen's Touareg,4 where the former is more luxurious than the latter. These are examples of platform sharing across vertically differentiated products within a firm and across firms. This paper explores the managerial implications and economic consequences of platform sharing under product differentiation models. Motivated by examples in the automobile industry as mentioned above, we consider platform sharing under horizontal product differentiation and platform sharing under vertical product differentiation, and compare the economic consequences of platform sharing under the two setups. In Section 2 we incorporate platform sharing into a standard model of horizontal product differentiation, due to Dixit (1979) and Singh and Vives (1984), where we consider the monopoly case and the duopoly case. In the monopoly case, one firm produces two differentiated products, 1 and 2, while in the duopoly case each firm i (=1,2=1,2) produces product i. Demand side of the model is characterized by the representative consumer who prefers product variety. Platform sharing reduces the degree of product differentiation, which in turn reduces the representative consumer's willingness to pay. Because of this effect, platform sharing makes consumers worse off in the monopoly case. However, we find that platform sharing makes consumers better off in the duopoly case because platform sharing intensifies competition between the two firms by reducing the degree of differentiation in their products. Firms can still choose to share a common platform in order to save on their fixed costs for developing platforms. We then explore welfare consequences of horizontal mergers in our framework and demonstrate a new channel through which horizontal mergers could hurt consumers. In Section 3 we explore the connection between platform sharing and vertical product differentiation under a standard framework of product-line pricing (Mussa and Rosen, 1978), where we focus on the two-type consumer case consisting of high-valuation consumers and low-valuation consumers. On the production side, we again consider monopoly as well as duopoly, and compare the two. In the case of monopoly, a single firm can produce a high-quality product (H-product) and a low-quality product (L-product), while in the case of duopoly one firm can produce a high-quality product and the other firm can produce a low-quality product. Platform sharing between an H-product and an L-product imposes restrictions on firm's abilities to differentiate the quality of products, which in turn increases the amount of surplus captured by consumers in the equilibrium. In other words, platform sharing increases the consumer surplus because its benefit of fixed cost savings has to be shared between producers and consumers. We find that a platform is more likely to be shared in the duopoly case than in the monopoly case, and we demonstrate a new channel through which the merger between H-firm and L-firm could make consumers worse off; that is, the merger makes platform sharing less attractive for producers, and this can reduce the consumer surplus because platform sharing benefits consumers. We will then conclude in Section 4 by discussing relationships between platform sharing under horizontal product differentiation and that under vertical product differentiation. The present paper is related to the previous analyses on cooperative research and development (R&D) and research joint ventures (RJVs), given that platform sharing can be regarded as an example of cooperative R&D and RJVs (see Katz, 1986, d'Aspremont and Jacquemin, 1988, Kamien et al., 1992, Suzumura, 1992, Motta, 1992 and Choi, 1993, among others). These previous papers, however, have not considered cases in which cooperative R&D and RJVs impose restrictions on the degree of product differentiation. A few recent papers have considered models that incorporate product platforms in product differentiation models. Krishnan and Gupta (2001) incorporated product platforms into a model of vertical product differentiation in which a firm chooses whether or not to introduce a common platform across two separate products, and demonstrated that using a common platform tends to result in the overdesign of low-end products (or the underdesign of high-end products) in the firm's product family. Ghosh and Morita (2006) considered a differentiated duopoly model in which two firms can share a common platform to save on their procurement costs from suppliers at the expense of the reduction in their horizontal product differentiation. Ghosh and Morita (2006) also offered an informal discussion on a monopoly analysis of platform sharing under vertical product differentiation.5 The present paper's contribution is to offer more comprehensive and systematic analyses of platform sharing by conducting both monopoly and duopoly analysis of platform sharing under horizontal product differentiation and that under vertical product differentiation. As mentioned above, Krishnan and Gupta (2001) focused on a monopolist's platform-sharing decision under vertical product differentiation, while Ghosh and Morita (2006) focused on platform sharing under horizontal product differentiation in the duopoly case with an informal discussion on a monopoly analysis of platform sharing under vertical product differentiation. Through our comprehensive and systematic analyses of platform sharing, we explore effects of mergers in the presence of platform sharing, and compare welfare consequences of platform sharing under horizontal product differentiation and that under vertical product differentiation.
نتیجه گیری انگلیسی
We have explored the managerial implications and economic consequences of platform sharing by analyzing two models; one model incorporates platform sharing into a horizontal product differentiation model, and the other incorporates it into a vertical product differentiation model. In this section we conclude the paper by discussing relationships between platform sharing under horizontal product differentiation and that under vertical product differentiation. In both models, the advantage of platform sharing is, simply, fixed-cost savings. That is, firms can save on fixed costs for platform development by using a common platform across two different products. In the horizontal product differentiation model, platform sharing reduces firms' profitability by decreasing the representative consumer's willingness to pay. Also, in the duopoly case, platform sharing further reduces firms' profitability by intensifying competition between firms. In the vertical product differentiation model, the quality of platform for the high-quality product and that for the low-quality product cannot be differentiated under platform sharing, and this is the disadvantage of platform sharing for producers. The disadvantage is relatively small when the loss of product differentiation due to platform sharing is small (in the former model) or when the difference between high-valuation consumers and low-valuation consumers is small (in the latter model), and a common platform is shared in the equilibrium when the disadvantage is small enough. It might appear that platform sharing across firms makes consumers worse off because firms cooperate in their product development process by sharing a common platform to maximize their joint profit. We have found, however, that in our duopoly cases, platform sharing increases consumer surplus in both models. In the horizontal product differentiation model, platform sharing reduces product variety which consumers prefer. At the same time, platform sharing also intensifies competition between the two firms, and we have found that this positive effect on consumers dominates the negative effect of reduced product variety so that platform sharing increases consumer surplus. In the vertical product differentiation model, the equilibrium quality of the low-quality product is higher under platform sharing, and this in turn increases the amount of surplus that high-valuation consumers can capture. In the monopoly case, platform sharing under vertical product differentiation makes consumers better off through the same logic as in the duopoly case mentioned above. On the other hand, platform sharing under horizontal product differentiation makes consumers worse off, because platform sharing cannot benefit consumers by intensifying competition in the monopoly case. In other words, welfare consequences of platform sharing under horizontal product differentiation critically depends on the competitiveness of the product market. This finding suggests that antitrust authorities should carefully investigate the competitiveness of product market in order to determine welfare consequences of platform sharing if it is under horizontal product differentiation. By incorporating platform sharing into product differentiation models, our analyses have shown new channels through which mergers negatively affect consumers. In the horizontal differentiation model, a merger can induce the merged firm to share a platform, which further decreases the consumer surplus by reducing product variety. In the vertical differentiation model, a platform is less likely to be shared when the two firms merge to become one firm. This negatively affects consumers because more surplus can be captured by consumers under platform sharing in this model. In this paper we have analyzed platform sharing under horizontal product differentiation and that under vertical product differentiation separately in two different models. In reality, a common platform is often shared across products that are differentiated both horizontally and vertically. In our future work, we plan to analyze platform sharing in such a setup.