An innovation decision model for a cross-competition system with spillovers

Guojun Leng; Naigang Hu; Wei Wang; Peng Li; Guojun Leng; Naigang Hu; Wei Wang; Peng Li

doi:10.3934/era.2026331

Electronic Research Archive

2026, Volume 34, Issue 10: 7678-7706. doi: 10.3934/era.2026331

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An innovation decision model for a cross-competition system with spillovers

1.
School of Electrical Engineering, Chengdu Aeronautic Polytechnic University, Chengdu 610100, China
2.
The State Key Laboratory of Electromechanical Integrated Manufacturing of High-Performance Electronic Equipments, Xidian University, Xi'an 710071, China
3.
School of Mechano-Electronic Engineering, Xidian University, Xi'an 710071, China

Received: 08 April 2026 Revised: 05 August 2026 Accepted: 05 August 2026 Published: 08 September 2026

We developed a game-theoretic model of an electronics manufacturing supply chain with cross-competition, in which each supplier trades with two common buyers simultaneously, and analyzed firms' innovation investment strategies with spillover effects. The model's structure and parameter space were motivated by key characteristics of the electronics manufacturing industry, such as rapid technological iteration, high spillover intensity, and cross-product competition. The results indicate that when the competition is weak, both process innovation and product innovation yield greater benefits to suppliers. However, fierce competition or increased investment scale can drive equilibrium shifts from innovations to non-innovations. Compared with product innovation, process innovation demonstrates greater resilience to competitive pressures in achieving dominance. At high spillover intensities, the benefits of product innovation can be completely negated, even in the presence of weak competition. This study constructs an innovation decision-making system for electronics manufacturing with cross-competition, providing guidance for innovation decisions in cross-competitive enterprises.
- decision model,
- product innovation,
- process innovation,
- spillover effects,
- electronics manufacturing,
- game theory
Citation: Guojun Leng, Naigang Hu, Wei Wang, Peng Li. An innovation decision model for a cross-competition system with spillovers[J]. Electronic Research Archive, 2026, 34(10): 7678-7706. doi: 10.3934/era.2026331

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Abstract

We developed a game-theoretic model of an electronics manufacturing supply chain with cross-competition, in which each supplier trades with two common buyers simultaneously, and analyzed firms' innovation investment strategies with spillover effects. The model's structure and parameter space were motivated by key characteristics of the electronics manufacturing industry, such as rapid technological iteration, high spillover intensity, and cross-product competition. The results indicate that when the competition is weak, both process innovation and product innovation yield greater benefits to suppliers. However, fierce competition or increased investment scale can drive equilibrium shifts from innovations to non-innovations. Compared with product innovation, process innovation demonstrates greater resilience to competitive pressures in achieving dominance. At high spillover intensities, the benefits of product innovation can be completely negated, even in the presence of weak competition. This study constructs an innovation decision-making system for electronics manufacturing with cross-competition, providing guidance for innovation decisions in cross-competitive enterprises.

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