Differential Game Analysis of Shared Manufacturing Platform Pricing Considering Cooperative Advertising Under Government Subsidies

Abstract

Shared manufacturing is a new sustainable manufacturing model formed under the rapid development of the sharing economy. This paper studies the shared manufacturing model composed of one manufacturer and one shared manufacturing platform under the condition of government subsidies based on differential game. The pricing of the shared manufacturing platform, the effectiveness and profitability of collaboration advertising with the manufacturer are investigated. The best decision-making for the centralized, the decentralized, and the bilateral cost-sharing contract model are discussed and the equilibrium outcomes of differential game are analyzed. The bilateral cost-sharing contract is improved and analyzed that the improved profit level reaches the concentration level. The numerical examples by using Matlab are analyzed, and management implications are provided. According to the findings, the centralized decision-making leads to lower prices for shared manufacturing platform than the decentralized decision-making but higher advertising effort and profit levels. Although the amount of the decentralized decision-making, advertising effort, and profit have increased due to the introduction of the bilateral cost-sharing contract, the overall profits have yet to reach the concentration level. This paper provides reference for government subsidy policies and shared manufacturing cooperation models.