Coordination and Trust as Pre-Requisites of Coopetition: Experimental Evidence

Abstract

It is generally believed that coopetition fails whenever the 'competition' and 'conflict' motives become predominant over the incentive to cooperate. However, very few studies, if any, investigate the difficulty to coordinate actions and expectations in a coopetition relation as one of the causes of its failure. As other scholars observed (e.g., Camerer and Knez 1994), many organizational dynamics resemble features of coordination games more than social dilemmas. In this chapter, we briefly discuss the experimental evidence on the determinants of coordination failure as these have been identified in laboratory experiments, and then we present some experiments on repeated coordination games with large groups that resemble organizational situations. We test experimentally the power of some treatment variables on the efficiency of coordination: the availability of full feedback about the distribution of players' choices, and the power of transfer of precedent across similar but not identical games in helping solve the coordination problem and reach efficient equilibria. We believe that understanding when and why coordination failure occurs in a pure-motive game structure may contribute significantly to our understanding of when and why mixed-motive ('coopetitive') relationships fail, and consequently, give advice about proper rules of organizational design.