Chapter 5: Sustainable Economic Stake and Coproduction in Competition: A Dynamic Analysis

Purpose/Objective: In the context of the service economy, the chapter analyses a dynamic model created for a competition market, aiming to reveal changes that take place when the stake of economic activity goes beyond the strictly competitive meanings, a coproduction with the customer being involved.

Design/Methodology/Approach: A mathematical model is analyzed, describing the interactions between potential consumers, suppliers acting in traditional production conditions, and those applying coproduction with customs. The analysis of the model is done in the frame of nonlinear dynamical systems with time delay.

Findings: The positive equilibrium point is determined, and the conditions for stability and the existence of the oscillatory solutions are given. Numerical simulations verify the theoretical findings, revealing when the system is stable or when it becomes unstable.

Significance/Implications/Conclusions: Consistent with the service approach, our chapter considers not just the common private angle of the economic action but also the environment of the economic actor. The mathematical model brings a special conceptual development by involving coproduction in the competition between the providers. It also reveals the systemic effects of such new interaction involvement.

Limitations: The present chapter develops a mathematical model for the single case of coproduction with the customer. Two kinds of suppliers are concerned, the third one representing the demand side. Numerical simulation is developed using theoretical scenarios.

Future Research: Subsequent developments will make the role of economic entities more complex, with competition and cooperation being assumed among them all. Diverse other types of joint production will also be approached.