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Who makes the pie bigger? An experimental study on co-opetition

Author

Listed:
  • Juan Lacomba
  • Francisco Lagos
  • Tibor Neugebauer

Abstract

The tension between cooperation and competition that characterizes many business relationships is experimentally studied in a 'pie'-creation game; value is created and increased through cooperation in a repeated prisoner's dilemma game. At the end, the player with the greater stake in the joint pie decides on the division of the pie. Three treatments of the pie-creation game are considered: in the first treatment, rivals create the pie; in the second, non-rivals create the pie; finally, in the third, the pie is created by subjects who do not know about the future pie-division. The data show that the competition for the right to split the pie biases behaviors towards defection when subjects play with their rival.

Suggested Citation

  • Juan Lacomba & Francisco Lagos & Tibor Neugebauer, 2011. "Who makes the pie bigger? An experimental study on co-opetition," New Zealand Economic Papers, Taylor & Francis Journals, vol. 45(1-2), pages 59-68.
  • Handle: RePEc:taf:nzecpp:v:45:y:2011:i:1-2:p:59-68
    DOI: 10.1080/00779954.2011.556070
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