Modeling Firms-relation in Modular Production Scheme Considering the Profit-sharing and Reaction Options and its Applications

In the studies of collaboration among firms, the scheme of operational flexibility is introduced to analyze the effect of environmental changes. Recently, novel models including the profit sharing and reaction of firms are discussed, and theoretical results show there exist equilibrium points among behaviors of makers and suppliers. However, these methods postulate the stochastic changes, and it is not clear in more realistic environment the equilibrium is still confirmed. This paper deals with the analysis of dynamical behavior of firms in three layered modular assembly models including the profit sharing and reaction of firms where the firms are regarded as agents who make decision based on the prediction obtained by the Genetic Programming. By using the simulation studies it is shown that even in the profit sharing and reaction option models, we see weeding out among firms and chaotic behavior in increases of profits.