How Does the New Member Affect the Network in Supplier Cooperation?

In supplier cooperation, firms may build and break down the relationship, which may affect on the utilities of firms and the efficiency of network in the network. In this paper, the competitive coefficient and the payoff of tie are first combined, so a new utility function is constructed. Then, through comparing the utility of network, and when competitive coefficient is symmetrical, we can conclude that the efficiency of network will increase with new relationship of new firm. Furthermore, the conditions under which the entrant firm establishes relationship with core firm or peripheral firm is also given. Whereas, competitive coefficient is asymmetrical, the efficiency may decrease.