Rewarding Participation in Service Value Networks: An Approach to Incentivize the Joint Provisioning of Complex E-Services

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 e-services to customers. Such service value networks are in their infancy, yet both academics and practitioners lack approaches to formalize and economically analyze them. To resolve this deficit, we introduce a formalization of service value networks. 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 participate in the networked value creation and to enable platform operators to enforce certain network characteristics. To this end, we introduce a metric to express the contribution of service providers to the whole network—the power ratio. For service value networks with power ratio based incentives, we conduct simulations to study their evolution and to analyze the power ratio's ability to foster competition.