The concurrence of technical and behavioral trends – such as lightweight approaches for service composition and a rising demand for customized services – fosters the emergence of a novel organizational paradigm: Service Value Networks (SVN). Distributed and highly-specialized service providers contribute to an overall value proposition. SVNs provide means for the ad-hoc composition of services that satisfies individual customers' needs. However, the distributed nature of these environments and the opportunistic behavior of participants require a purposeful design of incentives. Our contribution is threefold: We (i) provide an auction mechanism – the Complex Service Auction – to coordination value creation in SVNs which is incentive compatible in dominant strategies (truthful). To restore budget balance – the prerequisite for a mechanism's sustainability – and to implement incentives that increase a network's degree of interoperability, we (ii) present the Interoperability Transfer Function (ITF). Applying an agent-based simulation method, we (iii) numerically show that this payment scheme limits strategic behavior of service providers and strengthens interoperability endeavors compared to a benchmark transfer function.
Blau, Benjamin S.; Conte, Tobias D.; and Weinhardt, Christof, "INCENTIVES IN SERVICE VALUE NETWORKS – ON TRUTHFULNESS, SUSTAINABILITY, AND INTEROPERABILITY" (2010). ICIS 2010 Proceedings. 8.