The Inventor game: game-theoretical analysis of knowledge-sharing between inventors and employers

Knowledge-sharing has often been analysed by one-shot game models, where the balance between costs and the value of knowledge exchanges for different exchange partners has been calculated. This paper reviews this literature and discusses five of its assumptions: (1) the assumption of homogeneity of knowledge, (2) the assumption of one-shot solutions, (3) the assumption of knowledge as value, (4) the assumption of knowledge as the only instrument for an actor to influence the payouts, and (5) the assumption of deterministic profits from negotiation results. We propose a more realistic game-theoretical model for analysing knowledge-sharing, based on alternative assumptions, that is, heterogeneity of knowledge, multi-stage negotiations, knowledge value realized via production functions, the need for side payments, and the working of nature and discount factors. Our model may help in establishing new firms on the basis of existing knowledge owned by companies and their employees.