Allocation of decision rights among two parties with asymmetric bargaining powers in bidirectional open innovation

Takaya Kubota () and Shin’ya Okuda ()
Additional contact information
Takaya Kubota: Tohoku Gakuin University
Shin’ya Okuda: Nagoya City University

SN Business & Economics, 2023, vol. 3, issue 6, 1-17

Abstract: Abstract This study explores the allocation of decision rights between two parties with different bargaining powers in a bidirectional open innovation setting. We introduce the generalized Nash bargaining solution to allow for unequal bargaining power in ex-post negotiation. As a result, we propose that the party with contracting power releases decision rights depending on its bargaining power. In addition, we propose that the best allocation of decision rights for the maximization of innovation value or the realization of efficient innovation depends on bargaining power and is achieved voluntarily. Lastly, we point out that there are cases in which asymmetric ex-post bargaining power leads to collaboration failure. We conclude that ex-post bargaining power plays a crucial role in influencing the allocation of incentives and the outcomes of open innovation.

Keywords: Incomplete contract; Open innovation; Decision rights; Incentive; Bargaining (search for similar items in EconPapers)
JEL-codes: C78 D86 O36 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://link.springer.com/10.1007/s43546-023-00473-w Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:snbeco:v:3:y:2023:i:6:d:10.1007_s43546-023-00473-w

Ordering information: This journal article can be ordered from
https://www.springer.com/journal/43546

DOI: 10.1007/s43546-023-00473-w

Access Statistics for this article

SN Business & Economics is currently edited by Gino D'Oca

More articles in SN Business & Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().