An Extended N-player Network Game and Simulation of Four Investment Strategies on a Complex Innovation Network

Wen Zhou (), Nikita Koptyug, Shutao Ye, Yifan Jia and Xiaolong Lu
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Wen Zhou: School of Computer Engineering and Science, Postal: Shanghai University, Shanghai, China, and Kellogg School of Management, Northwestern Institute on Complex Systems (NICO), Northwestern University, Evanston, IL, United States of America
Shutao Ye: School of Computer Engineering and Science, Postal: Shanghai University, Shanghai, China
Yifan Jia: School of Computer Engineering and Science, Postal: Shanghai University, Shanghai, China
Xiaolong Lu: School of Computer Engineering and Science, Postal: Shanghai University, Shanghai, China

No 1097, Working Paper Series from Research Institute of Industrial Economics

Abstract: As computer science and complex network theory develop, non-cooperative games and their formation and application on complex networks have been important research topics. In the inter-firm innovation network, it is a typical game behavior for firms to invest in their alliance partners. Accounting for the possibility that firms can be resource constrained, this paper analyzes a coordination game using the Nash bargaining solution as allocation rules between firms in an inter-firm innovation network. We build an extended inter-firm n-player game based on nonidealized conditions, describe four investment strategies and simulate the strategies on an inter-firm innovation network in order to compare their performance. By analyzing the results of our experiments, we find that our proposed greedy strategy is the best-performing in most situations. We hope this study provides a theoretical insight into how firms make investment decisions.

Keywords: Complex Networks; Game Theory; Innovation; Innovation Network; Nash Equilibrium (search for similar items in EconPapers)
JEL-codes: C72 C81 C82 D81 L14 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2015-12-15
New Economics Papers: this item is included in nep-cdm, nep-cmp, nep-com, nep-cse, nep-gth, nep-ino, nep-net, nep-ore and nep-sbm
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Related works:
Journal Article: An Extended N-Player Network Game and Simulation of Four Investment Strategies on a Complex Innovation Network (2016)
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