The Role of Business Models in Bridging Technology and Market: Mathematical Modelling and Its Applications

This study aims to examine the role of business models (BM) in the context of digital transformation. The research methodology includes the following steps. First, the study develops a mathematical model to describe the role of BMs in bridging technology and market dynamics, including definitions, theorems, and axioms. Second, based on the mathematical model of BM as a ‘nudge’, three key findings are identified: (a) BM as a nudge significantly reduces market search costs after reaching a certain threshold, referred to as the ‘Chesbrough Point’; (b) BM as a nudge increases market size and diversity at any point following the ‘Chesbrough Point’; (c) Despite having BM as a nudge, technology experiences a long tail before reaching a sufficient market. Third, the study discusses the theoretical implications of BMs and their enhanced function as a nudge, particularly in the context of artificial intelligence and open innovation dynamics.