Title: Competition vs. collaboration: a four set game theory - innovation, collaboration, imitation, and 'do nothing'

Authors: Mo Li; Bang Nguyen; Xiaoyu Yu; Yuqing Han

Addresses: Warwick Business School, University of Warwick, Scarman Road, Coventry, West Midlands CV4 7AL, UK ' School of Business, East China University of Science and Technology, 130 Meilong Road, Xuhui District, Shanghai 200237, China ' School of Management, Shanghai University, Shanghai, China ' Antai College of Economics and Management, Shanghai Jiao Tong University, Shanghai, China

Abstract: Opinions on when competition or collaboration is optimal differ, particularly in the case of product innovation. To examine the broad determinants of both collaboration and innovation patterns, the present study takes a game theoretic approach and develops a four-strategy set (innovation, collaboration, imitation and 'do nothing') to understand when competition or collaboration is optimal. The model explores the collaboration determinants in depth, focusing on the sharing of collaboration costs. By designing and using the MATLAB animation software, the study generates the equilibrium solution for each strategy set. Based on the game theoretic approach, ten predictions are generated about: a) the probability of collaboration; b) the collaboration costs; c) the effect of technology on price and revenue. The study concludes with policy implications at both firm and national levels under conditions of weak intellectual property rights (IPR) such as in China based on the game theoretic approach.

Keywords: competition; innovation; collaboration; imitation; game theory.

DOI: 10.1504/IJTM.2018.091288

International Journal of Technology Management, 2018 Vol.76 No.3/4, pp.285 - 315

Accepted: 05 Sep 2016
Published online: 18 Apr 2018 *

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