The Non-cooperative Game and Cooperative Game Between Independent Innovation Firm and Imitative Innovation Firm

We divide innovative firms into independent innovation firm and imitative innovation firm. In this paper, we study the game between independent and imitative innovative firms. Their games include non-cooperative games and cooperative games. Using the model, we argue that the optimal game strategy for independent and imitating innovators is to play a cooperative game. They will both get higher expected returns by playing a cooperative game. This is also the case in the long run. Cooperation should be an important option in the inter-firm game.