DEVELOPMENT OF INSTITUTIONAL ENVIRONMENT OF SOCIAL AND INNOVATIVE ACTIVITIES: APPLICATION OF GAME THEORY
The use of the game theory, games, strategies of players and winnings obtained when making a decision are described with the aim of developing a new approach to analyze relationships that appear in the course of social innovation. On the basis of games that arise during the involvement of participants in the project, investment of the project, as well as directly during the development of the project, it is shown how the game balance is determined and can be changed. In determining the winnings that participants receive, they take into account socio-economic benefits, transaction costs, and the choice that the second player makes. It has been substantiated that with a decrease in transaction costs in this type of activity, the participant winnings and the possibility of choosing a strategy for the development of social innovation activity increase. Using the example of a game that arises when there are institutions supporting social projects, the possibility of attracting participants to this type of activity due to a reduction in potential losses from the choice of project participants is shown. Based on the analysis of the game matrices, as well as the conditions for achieving equilibrium, three main directions are formulated, the implementation of which will enable to activate social and innovative activities: reduction of transaction costs through the development of appropriate infrastructure, development of a supporting institutional environment, creation of joint projects based on cooperation of participants and business tools. The significance of this study is to demonstrate the use of a game theory for the development of social innovation.
Keywords: social innovation, game theory, institutions, informal and formal institutional environment.
Highlights:
♦ a game theory can be applied to analyze possible strategies of behavior of economic agents when making decisions about participation in social and innovative projects;
♦ when analyzing the winnings that economic agents have in one or another “game”, it is necessary to take into account the arising transaction costs, social and economic benefits, as well as player dissatisfaction, illustrated in refusal to participate in a social-innovative project;
♦ the main development pathways of social and innovation activity are: 1) reduction of transaction costs through the development of an appropriate infrastructure; 2) development of a supportive institutional environment; 3) creation of joint projects based on the cooperation of participants and tools of the business economy;
♦ supporting institutions that allow players to increase their gains from participation in social and innovative projects are of high importance.
Anna Yu. Veretennikova, Candidate of Economics, Researcher at the Center for Economic Theory, Institute of Economics, Ural Branch of Russian Academy of Sciences, Associate Professor of Department of Regional Economics, Innovative Entrepreneurship and Security, Institute of Public Administration and Entrepreneurship, Ural Federal University named after the First President of Russia B.N. Yeltsin, Ekaterinburg.