A game theory perspective of asymmetric alliances for new product development

P. Ben Chou; Ellen Thomas

doi:10.1504/IJEIM.2015.068432

A game theory perspective of asymmetric alliances for new product development

P. Ben Chou, Ellen Thomas

MT School of Management

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

By adopting and extending the game theoretical model developed by Chou (2011) from symmetric firms to asymmetric firms with monetary transfers, we characterise the strategic interactions between asymmetric firms in an alliance for new product development. We also integrate the game theoretical literature and empirical studies to show that a broader-scope link alliance tends to benefit the larger firm, while a narrower-scope scale alliance tends to benefit the smaller firm. The asymmetry of benefits also enables the larger firm to subsidise the smaller firm to maintain the stability of the alliance if it is beneficial for the larger firm to do so.

Original language	English (US)
Pages (from-to)	99-116
Number of pages	18
Journal	International Journal of Entrepreneurship and Innovation Management
Volume	19
Issue number	1-2
DOIs	https://doi.org/10.1504/IJEIM.2015.068432
State	Published - 2015

All Science Journal Classification (ASJC) codes

Business and International Management
Economics and Econometrics
Strategy and Management
Management of Technology and Innovation

Keywords

Asymmetric firms
Link alliance
NPD
Nash equilibrium
R&D scale alliance
Uame theory
Uew product development
Utrategic alliance

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10.1504/IJEIM.2015.068432

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abstract = "By adopting and extending the game theoretical model developed by Chou (2011) from symmetric firms to asymmetric firms with monetary transfers, we characterise the strategic interactions between asymmetric firms in an alliance for new product development. We also integrate the game theoretical literature and empirical studies to show that a broader-scope link alliance tends to benefit the larger firm, while a narrower-scope scale alliance tends to benefit the smaller firm. The asymmetry of benefits also enables the larger firm to subsidise the smaller firm to maintain the stability of the alliance if it is beneficial for the larger firm to do so.",

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A game theory perspective of asymmetric alliances for new product development

Abstract

All Science Journal Classification (ASJC) codes

Keywords

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