An evolutionary game-theoretic approach for analysis of startups’ funding mechanisms considering their opportunistic and responsible behavior based on system dynamics

Purpose Collaborating with startups is a fast track to green technological innovation (GTI) implementation for tech firms. On the other hand, startups’ opportunistic behavior during the collaboration could lead to GTI failure and a waste of tech firms’ investment. Accordingly, it is essential to conduct a dynamic analysis of the evolutionary behavior of tech firms and startups over time. In this regard, under government intervention, we consider a collaborative structure between two populations, including tech firms and startups. Design/methodology/approach In this study, an evolutionary game structure based on system dynamics was developed to explain the tech firms’ and startups’ evolutionary trends, emphasizing investment mechanisms and the startup’s commitment level through a feedback process. For this purpose, the influence of the startups’green innovative efforts on the system’s evolution under two feedback loops was investigated. Furthermore, the effects of tech firms’ penalty strategies and government intervention on system evolutionary behavior was analyzed. Findings The simulations revealed that applying the dynamic punishment policy can control the game’s oscillations in the evolutionary model and increase the startup’s and tech firm’s stability rate. When the penalty values change, and the startups’ credibility level is a variable under the impact of the green technological innovation features, it affects the evolutionary behavior of players over time through the positive feedback loop. It was also found that, despite the startups' opportunistic behaviors, effective government interference could raise the tech firms' tendency to invest in startups. Originality/value Unlike previous studies, we focus on a dynamic analysis approach to investigate the collaborative structure between tech firms and startups. For the first time, we investigate the evolutionary behavior of startups and tech firms in positive and negative feedback structures to see how GTI features affect startup credibility and system evolution. We examine the effects of static and dynamic penalty strategies employed by tech firms on startups’ innovative behaviors for the first time.