Investment in Collaborative Commerce Chain Systems Based on Option Game

Many companies that seek to jointly build a collaborative commerce chain system (CCCS) with their supply chain partners face a challenge to estimate the investment value while the attitude toward the participation is full of uncertainty. This research provides an option game valuation approach that clarifies the investment uncertainties by analyzing the expected revenue, cost, and time to the market for the au pair and cooperative partners, and the relation between the partners in CCCS is au pair and cooperative other than traditional IS. This paper analyzed how investment and effort level of partners impact investment occasion based on real-option and principal-agent theory, which found that the success of CCCS is lied on the cooperation between supply chain partners, although, there are some problems like 'ride free' and 'adverse selection' in the process. The research attempted to find what bring the puzzle and how to solve it.