In this chapter, we develop a dynamic model of collaboration between a manufacturer and its supplier, where the fundamental issue is, for each player, how to allocate own resources between improving an existing product and developping a new one. We study the optimal time path of effort allocation for each player in a noncooperative setting, and then look into the cooperative setting. We finally conduct a numerical analysis and observe how the optimal dynamics of keys variables change as parameters of the game vary.
BOWON, K. and EL OUARDIGHI, F. (2007). Supplier Manufacturer Collaboration on New Product Development. In: Advances in Dynamic Game Theory. Numerical Methods, Algorithms, and Applications to Ecology and Economics. 1st ed. Birkhäuser, pp. 527-546.