A Game Theoretic Analysis of Mechanisms to Induce Regional Technological Cooperation

Article type: Research Article

Authors: Sherali, Hanif D. | Li, Qing

Affiliations: Department of Industrial and Systems Engineering, Virginia Polytechnic Institute and State University, Blacksburg, Virginia 24061, USA. E-mail: [email protected]

Abstract: A concept of regional technological cooperation is developed based on a cooperative game theoretic model, in which a plan of payoff distributions induces an agreement that is acceptable to each participant. Under certain conditions, the underlying game is shown to be convex, and hence to have a nonempty core with the Shapley value allocations belonging to the core. A compensation scheme is devised based on the Shapley value allocations, whereby participants who enjoy a greater payoff with respect to the technological cooperation compensate the participants who receive a relatively lesser payoff via cooperation. In this manner, regional technological cooperation can bring overall benefits to all the involved players in the game. Some insightful examples are provided to illustrate the methodological concept.

Keywords: international technology transfer, regional technological cooperation, transfer mechanisms, game theory, coalitions, Shapley values, transferable utility

DOI: 10.3233/INF-2000-11206

Journal: Informatica, vol. 11, no. 2, pp. 179-194, 2000