Whether Consumers Should Participate in Co-Creation First?

ABSTRACT

Over the past few years, value co-creation between firms and consumers has gotten increased attention. In this work, analytical models were developed to systematically study the underlying reason for the participation of consumers in the co-creation process, as well as examine the conditions under which both firm and consumers benefit. From the extracted result, it was demonstrated that under certain conditions, consumers are willing to participate in value co-creation firstly. Interestingly, firm obtains the highest profit and consumers get the second highest surplus. As a result, both parties’ welfare increase since the depth of interaction between firm and consumers and the breadth of interaction between consumers is enhanced. Our work provides some new management insights on the practice of the value co-creation.

KEYWORDS:

• Consumer participation
• co-creation
• effort levels
• game theory

JEL:

• C70
• D42

Disclosure Statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China under [Grant No. 71531003].