Analysis of patent pool investment based on option game theory

Patent pool investment has become an important strategy to enhance the enterprises' competitive power, which should be actively used to protect independent intellectual property rights of the innovation achievements by Chinese enterprises for survival and development in the patent war. The traditional investment decision-making methods ignore the value of management's flexibility and the impact of competitive interaction, so it is limited in measuring the enterprises' patent pool investment with the characteristics of uncertainty, irreversibility and competition. Based on Option Game Theory, this paper sets up the asymmetric duopoly model to analyze the dominant enterprise and the target patent held enterprise's optimal decisions and carries out the balance strategic analysis and numerical analysis to inspect the influence of parameters on the investment option value and investment timing, establishing the general decision-making frame of patent pool investment analysis.