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Expectations of Reciprocity and Feedback when Competitors Share Information: Experimental Evidence

Author

Listed:
  • Bernhard Ganglmair

    ()

  • Alex Holcomb

    ()

  • Noah Myung

    ()

Abstract

Informal know-how trading and exchange of information among competitors has been well-documented for a variety of industries, including in science and R&D, and an individual’s expectations of reciprocity is understood to be a key determinant of such flow of information. We establish a feedback loop (as a representation of information trading) in the laboratory and show that an individual’s expectations of the recipient’s intentions to reciprocate matter more than a recipient’s ability to do so. This implies that reducing strategic uncertainty about competitors’ behavior has a bigger effect on the flow of information than reducing environmental uncertainty (about their ability to generate new information). We also show that the formation of beliefs about a recipient’s intentions to reciprocate are heavily influenced by past experience, where prior experience lingers and can have negative effects on the sustainability of productive and fruitful information exchange.

Suggested Citation

  • Bernhard Ganglmair & Alex Holcomb & Noah Myung, 2018. "Expectations of Reciprocity and Feedback when Competitors Share Information: Experimental Evidence," CRC TR 224 Discussion Paper Series crctr224_2018_040, University of Bonn and University of Mannheim, Germany.
  • Handle: RePEc:bon:boncrc:crctr224_2018_040
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    File URL: https://www.crctr224.de/en/research-output/discussion-papers/discussion-papers#DP40
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    More about this item

    Keywords

    knowledge diffusion; information sharing; reciprocity; collective innovation; R&D; conversation; experimental economics; centipede game;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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