Does Game Theory help understand Automotive Repair?

Question:

Hello, I'm an independent automotive diagnostic technician who analyzes and makes diagnostic decisions on all makes and all models of vehicle ranging from the...geez...I guess the 30s up to the newest models of vehicles (thanks to working with collision shops). I'm sure you are wondering where I'm going with this and maybe I'm trying to correlate something that really doesn't correlate. My very weak understanding of game theory has me considering that the act or auto repair, namely where a diagnostic decision has to be made, could be or is considered an imperfect game. The reason I say that is that the manufacturers do not explain to us, including their own dealer technicians, how systems really work or are supposed to work, do not give us known good data (ie: waveforms, meter readings, expected scan tool data ranges, etc.). So, unlike chess where everything is right there, and even though I may not know what the other player is thinking I can potentially see "all" outcomes, at least in the next few moves. It's more like poker, where I don't necessarily know how a system works, or what all the players are in the system to cause a concern or symptom.

I don't know what I would do with the information you give me if I'm correct in this idea, short of maybe trying to make an argument to the manufacturers about how holding back information is a flaw in their strategy and it can be demonstrated using game theory.

Answer:

Let’s consider the three parties involved with a car sale and its potential repair. The three parties are, the consumer, the firm, and the repairman.

First, let’s try to view this from the firm’s perspective. Within in automobile they presumably have public and proprietary features. Many of the public features are well understood, you can open the manual and easily recognize what oil the vehicle uses and complete an oil change. But other features are likely proprietary. For example, the specific technology an engine uses to achieve a higher gas mileage. This technology may change how to properly diagnose and repair the vehicle but the company would be unwilling to share specific details because it would reveal their technology to competitors. Of course, they could patent the technology and make it public, but in some cases a trade secret is more valuable to a company compared to conventional patent. So the company is weighing the risk of revealing proprietary information to competitors with making their vehicles easier to repair, which may induce more sales.

Second, we have the consumer. This individual will have preferences over the characteristics of the vehicle. Firms, will have some knowledge about what the customer base values and in general will try to market vehicles that capture as many consumers as possible. It is hard to tell if consumers value ease of repair. Perhaps, consumers prefer higher gas mileage over a simpler more reparable vehicle, and so firms will cater to that desire.

Finally we have the repairman. Firms likely consider the ease of repair as characteristics of the product when engineering, but there are always tradeoffs. When engineering a product, certain features are more important and less important, and from the repairman’s view I imagine they would prefer the engineers up rank the importance of ease of repair. But if consumers don’t place much value on ease of repair it is unlikely that firms will engineer their vehicles with the repairman’s preferences in mind.

I hope this answer clarifies some thoughts on right to repair and firm’s incentives. I am not sure that making vehicles more difficult to repair is either a profitable strategy for firms or if they would be better off embracing right to repair.

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Last updated on
February 26, 2024

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