Sourcing Co-Created Products: Should your Suppliers Collaborate?

We investigate the phenomenon of sourcing co-created products. Specifically, we study how a multi-product downstream firm should source from the upstream market, that is single-source versus multi-source, in a situation where the products are co-created with the suppliers. We conceptualize co-creation as investments made at different hierarchical levels aimed at reducing the production costs incurred by the supplies. We also incorporate into our model the downstream firm's decision to establish a collaborative, knowledge-sharing environment for its suppliers.

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