Inter-rationality; Modeling of bounded rationality in open innovation dynamics

Abstract

If any firm or agent makes decisions under inter-rationality, which is a kind of bounded rationality in open innovation dynamics, it would not stop growing at a certain point of the reverse-U curve, but grow continuously following a zigzag pattern. In this study, we examine whether there is any relation between open innovation and sustainable economic growth, which might explain why some firms grow continuously and others collapse. A conceptual and mathematical model of inter-rationality in open innovation dynamics is constructed. The theoretical contribution of inter-rationality that it could be the precondition or essence of economics, political economics, social science, or open innovation engineering in the digital transformation era as the economic human's dominant type of bounded rationality. The zigzag growth pattern resulting from open innovation dynamics which is based on the inter-rationality of economic agents could suggest any practical way to overcome the growth limits of firms or economic system. © 2022