Government regulation strategy, leading firms’ innovation strategy, and following firms imitation strategy: An analysis based on evolutionary game theory

Abstract

In the innovation ecosystem, the knowledge-based game behavior of each subject not only pertains to its own survival and development but also affects evolution of the innovation ecosystem. The present study investigates the choice of government’s regulation strategy, leading firms’ innovation protection strategy and following firms’ imitation strategy from the perspective of group evolutionary game. Based on the cost-benefit perspective, an asymmetric tripartite evolutionary game model and a simulation model are constructed to analyze the strategies and stability of the evolutionary equilibrium of each subject. We focus mainly on the protection intensity of innovation achievements by leading enterprises and the difficulty of imitation and substitution by following enterprises. The cost of patent operation and maintenance, government subsidies, and the relative difficulty of technology substitution and imitation were identified as the key factors affecting the evolutionary equilibrium of the system. Based on different scenarios resulting from the aforementioned factors, four equilibrium states are observed in the system, namely {no government regulation, technology secrecy, substitution}, {no government regulation, technology secrecy, imitation}, {no government regulation, patent application, imitation}, and {government regulation, patent application, imitation}. Finally, the study suggests corresponding recommendations for the three parties, which can help governments as well as the leading and following firms to choose appropriate behavioral strategies. At the same time, this study offers positive insights to participants in the global innovation ecosystem.