Dynamics of Costs and Revenue Sharing Schemes in Open Innovation: An Evolutionary Game Approach

Guest Editor Yuantao Teng (Jilin Normal University, Shiping City, China)

The concept of open innovation has recently gained widespread attention. It is particularly relevant now because many firms are required to implement it. In order to investigate the incentives of open innovation, this article analyzed companies' choice to open innovation in an evolutionary game setting using replicator dynamics. It discussed how costs and revenue allocation schemes affect the final equilibrium. Evolutionary game analysis shows that participants' choices are related to schemes of cost sharing. The probability of choosing open innovation is positively related to excess benefits, and negatively related to total costs. There exists an optimal excess benefits allocation, so that firms tend to adopt open innovation strongest. The probability of both firms adopting open innovation is greater in punishment case. This article shed some light on how to promote companies to choose open innovation.

Journal: International Journal of Simulation: Systems, Science & Technology, IJSSST V17

Published: Jan 7, 2016

DOI: 10.5013/IJSSST.a.17.01.04