Exploring the contingencies of private-collective innovation: An agent-based model
Zaggl, Christina Raasch · 2014
The private-collective model has been advanced as a new model specifying the incentives that give rise to innovation in an economy: It involves the free revealing of design information created at private expense, in exchange for a mix of private and collectively provided benefits. We explore the environmental conditions in which private-collective innovation is likely to emerge and thrive. Our agent-based simulation makes it possible to study multiple contingencies, their interactions and outcomes in a systematic way. We find that the private-collective model of innovation delivers greater innovation performance, and is more likely to be sustainable, if the environment is characterized by low rivalry among agents, high imitability of designs, and extraneous benefits to reputation. Interestingly, the detectability of design plagiarism is negatively associated with system performance and with the emergence and stability of cooperation due to extensive punishment activities. The paper contributes to our understanding of the emergence of private-collective innovation from self-regarding individual behavior and of the system-level performance outcomes, as compared to the canonical private-investment model of innovation.