Using cooperative game theory this book shows how bargaining structure affects the
distribution of value among the constituent firms of the value chain. Results show that
positions in the bargaining structure most conducive to value capture are those where large
complementarity gains are realized and split ideally among a small number of negotiators.
Further leveraging case studies from the aviation and home appliance industries the author
suggests that the bargaining structure can be shaped through by architecture of the value chain
and in turn through the architecture of the product and the action of powerful firms to
optimize value capture.
