Technology acquisition strategy in the context of the Internet of Things using game theory

In the era of open innovation, it is of great significance to analyse strategic trade-offs for enterprises' technology acquisition between external and internal. This paper considers the relative pay-offs amongst two manufacturers' selection for their respective scarce technology of the Internet of Things, using game theory models and numerical analysis. In addition to self-innovation relying on internal resources, enterprises can obtain technology from external sources, including technology imported from a third party or cross-licensing with its competitor. Unlike empirical analysis, this study focuses on the strategic firms' interactions at the micro-level study and operational considerations, such as the factors influencing the mode of enterprise technology acquisition, firm competition and cooperation behaviour mechanism, and the selection of innovation initiators. The findings provide implications for competitive enterprises in high-tech industries to acquire complementary technologies by identifying what conditions lead to win-win outcomes. In particular, firms can adjust their licensing levels under certain conditions to adapt to the disparities in each other's development capabilities, thus achieving cross-licensing agreements.