In this theory-building research, we develop a set of propositions to examine the existence, the essential workings, and the conditions for value created and borne by business network co-production. We use transaction cost economics and informedness theory to explain why business network co-production exists; how informedness enhances value; and why customers, a network orchestrator and open standards add value to co-production. We use multiple observations from the public transport industry to validate the theoretical perspectives we develop. Triggered by liberalization and enabled by smart cards, this industry is going through a digital transformation from segmented travel to providing networked travel, where service vendors co-produce customer travel services to produce multimodal customer-oriented services.

Business networks, Co-production, Customer satisfaction, Economic and social effects, Economics, Informedness, Mass transportation, Network co-production, Property rights, Public transportation, Sales, Smart cards, Strategic planning, Strategy, Theory development, Transaction cost, Transaction costs
ERIM Article Series (EAS)
System Sciences (HICSS)
43rd Annual Hawaii International Conference on System Sciences, HICSS-43
Erasmus Research Institute of Management

Kauffman, R.J, Li, T, & van Heck, H.W.G.M. (2010). A theory of informedness and business network co-production. In System Sciences (HICSS). doi:10.1109/HICSS.2010.39