Abstract: Prior research on open innovation has found that extensive cooperation with diversified innovators is necessary for organizations to acquire external knowledge and enhance their innovation performance. Innovation alliance is a critical means of establishing and maintaining cooperative relationships. However, understanding the processes and outcomes of inter-organizational cooperation is not sufficient for explaining the formation mechanism of innovation alliance and sustained open innovation activities. Instead, some core partners usually act as important roles in the organization's open innovation practices. In the context of open innovation, how to choose appropriate partners to set up the innovation alliance is an important issue for organizations. Based on the perspective of inter-organizational knowledge transfer, a knowledge chain is constructed in this paper which is composed of a knowledge source, a knowledge transformation intermediary, and a third-party information service agency. A multi-stage sequential game model is designed by using the intellectual property contract as a cooperation mechanism, and the impact of the organization's alliance strategy on knowledge creation and innovation performance is analyzed.

Key words: open innovation; innovation alliance; knowledge transfer; knowledge chain