Journal Article

VALUE CAPTURE THEORY: A STRATEGIC MANAGEMENT REVIEW

GANS, JOSHUA, RYALL, MICHAEL D.

2017

Overview

Research summary: This article provides the first review of a growing line of scholarly work in strategy that we refer to as \"value capture theory.\" The common thread in this work is its use of cooperative game theory as a general, mathematical foundation upon which to build a deep understanding of firm performance in market settings. Our review: (1) describes the primary elements of the theory; (2) highlights important blindspots that it resolves with respect to existing theoretical approaches; (3) calls attention to several of its novel insights; and (4) summarizes a myriad of applications and empirical studies that have appeared in recent years using value capture theory. Managerial summary: Traditionally, theoretical claims in strategic management have been supported by informal, qualitative reasoning. Recently, however, a new line of theoretical work based upon mathematical methods, known as \"value capture theory,\" has been gaining in popularity. This article reviews the recent advances in this line with a particular emphasis upon a number of its important insights, several of which challenge longstanding propositions from the traditional line. For managers, the formal nature of value capture theory is well-aligned with aata-ariven analyses of strategic situations.

• Publisher: Wiley Blackwell,John Wiley & Sons, Ltd,Wiley Periodicals Inc
• Subject: competition / Cooperation / cooperative game theory / Game theory / Organizational effectiveness / Organizational performance / Popularity / Strategic management / Theory / Valuation / value capture / value creation