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A bi-objective game-theoretic model for collaboration formation between software development firms.

Muhammad Fahimullah¹, Yasir Faheem¹, Naveed Ahmad¹

¹Department of Computer Science, COMSATS University Islamabad, Islamabad Campus, Pakistan.

|July 11, 2019

Summary

Selecting the right software development partner is crucial for successful alliances. This study introduces a bi-objective game-theoretic model for partner selection, considering both learning and financial revenue objectives for optimal collaboration strategies.

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Area of Science:

Business Strategy
Game Theory
Software Engineering

Background:

Increasing need for collaborations in software development, especially for SMEs, driven by technological advancements and competition.
Existing partner selection methods are often one-sided or fail to account for diverse collaboration objectives beyond financial gain.
Collaborating firms may have multiple, distinct objectives, such as learning and financial revenue, which are not adequately addressed by current models.

Purpose of the Study:

To propose a novel bi-objective game-theoretic model for selecting appropriate collaboration partners in the software industry.
To enable partner selection based on individual preferences for learning and financial revenue objectives.
To develop a fair payoff distribution mechanism considering multiple objectives and investment factors.

Main Methods:

Development of a bi-objective game-theoretic model for partner selection.
Application of a Nash Bargaining approach for payoff distribution.
Analysis of various scenarios to determine optimal collaboration strategies.

Main Results:

The proposed model facilitates partner selection considering dual objectives of learning and financial revenue.
A fair payoff distribution is calculated based on individual goals, cost contribution, cooperation ratio, and knowledge investment.
The model provides insights into optimal strategies for firms with differing or multiple collaboration objectives.

Conclusions:

The bi-objective game-theoretic model offers a more realistic approach to partner selection in software development alliances.
Fairly distributing payoffs based on multiple objectives and investment parameters is essential for successful collaborations.
This research provides a framework for firms to navigate complex collaboration decisions and achieve desired outcomes.