The application of game theory to incentives for innovation in modern business

Abstract

This thesis reports on a research project investigating the application of game theory to incentives for innovation in modern business. The overall aim of this study is to build a conceptual framework, from the strategic management perspective, for the application of incentives for innovation in order to respond to signals that there is a need to innovate. Game theory is applied as a framework for the analysis of interactions between companies and identification of how the incentives for innovation arise.The research questions of this study are: What signals the need for innovation? How do the incentives for innovation arise? What are the potential problems of changing the game through innovation? The inductive research approach is employed for the study. Starting from case studies (n=6), an initial insight for the direction of the study was provided, from which the base of semi-structured interviews (n=12) was established. The semi-structured interview further investigated and explored the issues discovered in the case study, and the results were validated by a questionnaire survey (n=119). The original contributions to knowledge are: the signals pointing to the need for innovation are identified; the situations where the incentives for innovation can arise are investigated. Barriers and difficulties that a company may encounter while trying to innovate are discussed, and cooperation in innovation is suggested as a way to remove the barriers and restore the incentive for innovation. A predictive model based on the conceptual framework built from this study is recommended for further research.

Date of Award	31 Dec 2014
Original language	English
Awarding Institution	The University of Manchester