Competition dynamics in a customer–complementor business ecosystem: a game-theoretical model

What the paper says

Purpose The purpose of this work is to comprehend the concept of business ecosystems in today’s interconnected and fast-evolving markets, where value is co-generated through dynamic relationships among diverse stakeholders. It aims to analyze how the balance of collaboration and competition, particularly the interactions between complementors, customers and focal businesses, contributes to ecosystems’ overall success and sustainability. Design/methodology/approach This study develops a generalizable product selection model based on evolutionary game theory (EGT), involving three fundamental classes of players including Original Equipment Manufacturers (OEMs) delivering core products, complementors who complement these core products, and customers whose preferences guide the motion of ecosystems. This study visualizes how strategic choices evolve over time and recur within customer and complementor populations. Findings The findings provides valuable insights into the dynamics of cooperation and competition, including the shifting of strategic actions based on both internal (e.g. shifting customer preferences) and external factors (e.g. market changes). It clarifies the processes through which various elements influence collective attitudes and their impacts on the game’s progression and equilibrium. We also emphasize the importance of avoiding self-centered competitive behavior that could threaten an entity’s competitive position within the ecosystem. Originality/value Despite significant advancements in ecosystem research, the application of evolutionary game theory to model strategic interactions between customers and complementors is still needed. The originality of this work lies in enlightening strategy co-evolution in multi-player systems and illustrating how it affects sustainable value creation.