Abstract
This paper addresses the issue that what hardware enterprise should do to prevent the risk of core software outage in the context of trade sanction. This paper first constructs a duopoly Hotelling model of two competitive hardware products. Then the risk of software outage is evaluated by comparing the impact of software outage initiated by government on the profit change of the software firm and the hardware firm of which supply is cut off. Finally, corresponding risk coping strategies are proposed. Our analysis indicates that: When the two hardware enterprises belong to the same country, the software outage risk is small; otherwise, the software outage risk is small only when the competitive disadvantage of the hardware enterprise caused by the outage of software supply is small. Besides, the requirement for risk prevention is lowered with the increase of hardware quality, consumer preference and unit income from software. This study demonstrates that, in the case of software outage, the profit loss of the initiator country may be greater than that of the country of which the supply is cut-off, and provides decision supports and management implications for hardware enterprises and their countries on how to deal with the risk of software outage initiated by other governments.
| Translated title of the contribution | Game analysis of hardware enterprises' core software outage risk |
|---|---|
| Original language | Chinese (Traditional) |
| Pages (from-to) | 2891-2900 |
| Number of pages | 10 |
| Journal | Xitong Gongcheng Lilun yu Shijian/System Engineering Theory and Practice |
| Volume | 42 |
| Issue number | 11 |
| DOIs | |
| State | Published - Nov 2022 |