Mechanism Design as Collaborative Production Systems

This paper discusses a platform in which customer participation shapes product development in a collaborative production system such as LEGO IDEAS. By employing ‘mechanism design’ developed in economics, our objective is to build a production system in which the platform takes into account the potential demands of the customers. In general, customers’ potential needs are private information and it is difficult to gather adequate information even through marketing surveys. Therefore, we provide a framework in which the members of the platform propose their alternatives and let customers vote based on them. The choices offered by the platforms are necessarily limited to those that can be produced by their production systems. This allows for the collection of information on highly feasible products. In addition, a scoring rule is introduced to determine how well the suitability of the proposal matches the needs of the consumer, and multiple proposals are evaluated under that rule. Finally, we also propose a method to implement platform exploration and exploitation guidelines through natural language analysis of descriptive responses from customers.