Value capture theory: A strategic management review

CITATION

Gans, J., & Ryall, M. D. (2017). Value capture theory: A strategic management review. Strategic Management Journal, 38(1), 17-41. doi:10.1002/smj.2592

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ABSTRACT
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
data-driven analyses of strategic situations.


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