Game theoretical approach for technology adoption and government strategic decisions

This paper demonstrates the strategies of governments to influence the adoption of technology among firms. Technological advances offer new paradigms for development. However, developing countries are still behind to fully take advantages of these improvements due to adoption of technology problem. The government's low efficiency delays investment in latest technologies that require greater experience and investment on the part of firms when undertaking technology adoption decisions. Backward induction game model is constructed subject to preferential policy of technology adoption. The game consists of two players, government and firms. The paper finds the Nash equilibrium of the game under the specific three strategies of the government. A real case example of Pakistan's telecommunications sector is taken to demonstrate this approach. The result shows that government decisions are significant, which lead to different strategic behaviours of firms in the technology adoption game.