DYNAMICS OF COSTS AND REVENUE SHARING SCHEMES IN OPEN INNOVATION: AN EVOLUTIONARY GAME APPROACH

摘要

The concept of open innovation has recently gained widespread attention. It is particularly relevant now because manyfirms are required to implement it. In order to investigate the incentives of open innovation, this article analyzed companies' choiceto open innovation in an evolutionary game setting using replicator dynamics. It discussed how costs and revenue allocationschemes affect the final equilibrium. Evolutionary game analysis shows that participants’ choices are related to schemes of costsharing. 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 bothfirms adopting open innovation is greater in punishment case. This article shed some light on how to promote companies to chooseopen innovation.