Branding/Logomark minus Citation Combined Shape Icon/Bookmark-empty Icon/Copy Icon/Collection Icon/Close Copy 7 no author result Created with Sketch. Icon/Back Created with Sketch. Match!

Using an Iterated Prisoner's Dilemma with Exit Option to Study Alliance Behavior: Results of a Tournament and Simulation

Published on Dec 1, 2005in Computational and Mathematical Organization Theory 1.37
· DOI :10.1007/s10588-005-5589-3
Steven E. Phelan14
Estimated H-index: 14
(UNLV: University of Nevada, Las Vegas),
Richard J. Arend17
Estimated H-index: 17
(UNLV: University of Nevada, Las Vegas),
Darryl A. Seale17
Estimated H-index: 17
(UNLV: University of Nevada, Las Vegas)
Cite
Abstract
Nearly half of all strategic alliances fail (Park and Russo, 1996; Dyer et al., 2001), often because of opportunistic behavior by one party or the other. We use a tournament and simulation to study strategies in an iterated prisoner's dilemma game with exit option to shed light on how a firm should react to an opportunistic partner. Our results indicate that a firm should give an alliance partner a second chance following an opportunistic act but that subsequent behavior should be contingent on the value of the next best opportunity outside the alliance. Firms should be more forgiving if the potential benefits from the alliance exceed other opportunities. The strategies were also found to be robust across a wide range of game lengths. The implications of these results for alliance strategies are discussed.
  • References (40)
  • Citations (18)
Cite
References40
Newest
Published on Oct 1, 1985
Robert Axelrod43
Estimated H-index: 43
(UM: University of Michigan),
Willie Hamilton56
Estimated H-index: 56
(UM: University of Michigan)
Cooperation in organisms, whether bacteria or primates, has been a difficulty for evolutionary theory since Darwin. On the assumption that interactions between pairs of individuals occur on a probabilistic basis, a model is developed based on the concept of an evolutionarily stable strategy in the context of the Prisoner9s Dilemma game. Deductions from the model, and the results of a computer tournament show how cooperation based on reciprocity can get started in an asocial world, can thrive whi...
Published on Jan 1, 2005
D. Gordon Smith7
Estimated H-index: 7
(BYU: Brigham Young University)
Today, many biotechnology firms use strategic alliances to contract with other companies. This article contends that the governance structure of these alliances - specifically, the "contractual board" - provides an integrated restraint on opportunism. While an alliance agreement's exit structure could provide a check on opportunism by allowing the parties to exit at will, such exit provisions also can be used opportunistically. Most alliance agreements, therefore, provide for contractual "lock i...
Published on Oct 1, 2004in Organization Science 3.26
Andrew C. Inkpen35
Estimated H-index: 35
(ASU: Arizona State University),
Steven C. Currall17
Estimated H-index: 17
(Rice University)
This article examines the evolution of trust, control, and learning in a joint venture relationship. Using a coevolutionary approach, we develop a framework that shows how initial joint venture conditions give way to evolved conditions as joint venture partners develop an understanding of each other and adjust the collaborative process. We explore the relationship between trust and control in joint ventures and identify how these two critical concepts impact joint venture processes. We argue tha...
This paper analyzes the recent progress in the understanding of a class of organizations known as hybrid forms. The growing literature on these forms, standing between markets and hierarchies, raises important questions about their nature and role in a market economy. Adopting a transaction-cost perspective, the paper first confronts the conceptual problem posed by this apparently heterogeneous set of arrangements. It then proceeds to explore the attributes characterizing their mode of coordinat...
Published on Aug 1, 2004in Academy of Management Perspectives 3.86
Africa Ariño19
Estimated H-index: 19
,
Jeffrey J. Reuer41
Estimated H-index: 41
Executive Overview Research on strategic alliances structuring has been dominated by a concern for the choice between equity or non-equity agreements. However, little attention has been paid to other structuring aspects, such as the choice of the contractual provisions that will regulate the relationship. Contract design is an essential part of alliance structuring, and contract renegotiation may become a key element of successful alliance adaptation. Designing and renegotiating complex contract...
Published on Dec 1, 2003in Industrial and Corporate Change 1.82
Tiziana Casciaro15
Estimated H-index: 15
(Harvard University)
Research in transaction cost economics and structural sociology has emphasized the role of opportunism and trust in the choice between equity and non-equity governance forms in alliances. This paper suggests that the uncertainty surrounding partner cooperation is not straightforwardly predictive of governance structure in alliances. Instead, task uncertainty and strategic uncertainty associated with the activities performed within alliances induce coordination and adaptation requirements that ar...
Published on Jan 1, 2003in Journal of International Management 2.83
Ming Zeng1
Estimated H-index: 1
(Cheung Kong Graduate School of Business)
This paper first argues that joint venture partners face a "cooperative dilemma" in managing the inherent tension between cooperation and competition, and then, drawing from the game theory literature, explores various structural factors that improve partner cooperation. Empirical analysis shows that better protection of one's own contribution to joint ventures, similarity in partners' organizational cultures or management styles, and continuous reliance on future contribution from partners led ...
Published on Jun 1, 2002in Journal of Management 9.06
R. Duane Ireland60
Estimated H-index: 60
(UR: University of Richmond),
Michael A. Hitt95
Estimated H-index: 95
(College of Business Administration),
Deepa Vaidyanath3
Estimated H-index: 3
(College of Business Administration)
Strategic alliances are an important source of resources, learning, and thereby competitive advantage. Few firms have all of the resources needed to compete effectively in the current dynamic landscape. Thus, firms seek access to the necessary resources through alliances. We examine the management of strategic alliances using the theoretical frames of transactions cost, social network theory and the resource-based view. Alliances must be effectively managed for their benefits to be realized. Eff...
Published on Feb 1, 2002in Strategic Management Journal 5.57
Jeffrey J. Reuer41
Estimated H-index: 41
(Max M. Fisher College of Business),
Maurizio Zollo24
Estimated H-index: 24
(Ad: INSEAD),
Harbir Singh42
Estimated H-index: 42
(UPenn: University of Pennsylvania)
This paper investigates the occurrence and determinants of post-formation governance changes in strategic alliances, including alterations in alliances' contracts, boards or oversight committees, and monitoring mechanisms. We examine alliances in the biotechnology industry and find that firms' unique alliance experience trajectories affect the likelihood of such ex post adjustments in these partnerships. Transactional features such as the alliance's scope, its division of labor, and the relevanc...
Published on Feb 1, 2002in Journal of Management 9.06
Jeffrey J. Reuer41
Estimated H-index: 41
(Max M. Fisher College of Business),
Africa Ariño19
Estimated H-index: 19
(University of Navarra)
This study provides an empirical investigation of the incidence and antecedents of contractual renegotiations in strategic alliances. We bring together initial conditions based on transaction cost theory and ex post contingencies highlighted by recent conceptual and qualitative research on the evolution of collaborative agreements. The results indicate that firms tend to change the governance of alliances when a misalignment exists between the chosen governance structure and features of the tran...
Cited By18
Newest
Moshe Dror36
Estimated H-index: 36
(UA: University of Arizona),
Graham Kendall48
Estimated H-index: 48
(University of Nottingham Malaysia Campus),
Amnon Rapoport48
Estimated H-index: 48
(UCR: University of California, Riverside)
Goofspiel is a simple two-person zero-sum game for which there exist no known equilibrium strategies. To gain insight into what constitute winning strategies, we conducted a round-robin tournament in which participants were asked to provide computerized programs for playing the game with or without carryover. Each of these two variants was to be played under two quite different objective functions, namely, maximization of the cumulative number of points won across all opponents (as in Axelrod’s ...
Published on Jul 30, 2015in PLOS ONE 2.78
Amnon Rapoport48
Estimated H-index: 48
(UCR: University of California, Riverside),
Darryl A. Seale17
Estimated H-index: 17
(UNLV: University of Nevada, Las Vegas),
Andrew M. Colman31
Estimated H-index: 31
(University of Leicester)
Axelrod’s celebrated Prisoner’s Dilemma computer tournaments, published in the early 1980s, were designed to find effective ways of acting in everyday interactions with the strategic properties of the iterated Prisoner’s Dilemma game. The winner of both tournaments was tit-for-tat, a program that cooperates on the first round and then, on every subsequent round, copies the co-player’s choice from the previous round. This has been interpreted as evidence that tit-for-tat is an effective general-p...
Published on Mar 1, 2015in Expert Systems With Applications 4.29
Jbid Arsenyan6
Estimated H-index: 6
(BAU: Bahçeşehir University),
Gülçin Büyüközkan36
Estimated H-index: 36
(Galatasaray University),
Orhan Feyzioğlu12
Estimated H-index: 12
(Galatasaray University)
The revenue of two partners from a collaborative product development (CPD) project is modeled.Nash Bargaining solution is applied to define optimum strategies.The effects of different parameters on the optimum solution are analyzed.Trust is a major concern in CPD projects, and it indicates that no collaboration is preferable with the lack of trust.Learning is a value adding dimension in the model. While collaborative product development (CPD) is adopted by more and more firms as a business strat...
Published on Jan 1, 2015in Mathematical Problems in Engineering 1.18
Luyun Xu1
Estimated H-index: 1
(Hunan University),
Dong Liang1
Estimated H-index: 1
+ 1 AuthorsXu Xiao1
Estimated H-index: 1
R&D outsourcing becomes the often-adopted strategy for firms to innovate. However, R&D cooperation often ends up with failure because of its inherent quality of instability. One of the main reasons for cooperation failure is the opportunistic behavior. As the R&D contract between firms is inherently incomplete, opportunistic behavior always cannot be avoided in the collaborative process. R&D cooperation has been divided into horizontal and vertical types. This paper utilizes game theory to study...
F. Nicoleta Uzea1
Estimated H-index: 1
,
Murray Fulton19
Estimated H-index: 19
(U of S: University of Saskatchewan)
Despite their continuing popularity and value-creation potential, strategic alliances fail as often as they succeed. Alliance failure is often attributed to opportunistic behavior by one or more of the partners. This paper draws upon empirical evidence from a successful alliance – a federated cooperative marketing system – to shed light on some of the economic and behavioral strategies and mechanisms that alliances can use to promote effective cooperation among alliance partners. The paper also ...
Published on Jan 1, 2014 in HICSS (Hawaii International Conference on System Sciences)
Tobias Engel4
Estimated H-index: 4
,
Andreas Englschalk1
Estimated H-index: 1
+ 2 AuthorsHelmut Krcmar36
Estimated H-index: 36
Significant differences exist in the exchange of information between supply chains members. Various factors such as bargaining power, trust, contracts, and information management capabilities of firms influence firms' information sharing behaviors. Based on an exploratory case study, we analyze and compare supply chains to identify different information sharing patterns, and the factors contributing towards these differences. We found that while information sharing leads to higher benefits for a...
Published on Mar 1, 2013in Group Decision and Negotiation 2.01
Rudolf Vetschera17
Estimated H-index: 17
(University of Vienna),
D. Marc Kilgour29
Estimated H-index: 29
(WLU: Wilfrid Laurier University)
Most fair-division procedures are modeled on cake-cutting procedures such as “I cut, you choose”. The inputs are players’ choices, which are assumed to reflect preferences but not fully reveal them; the output is a division that is in some sense fair. However, it seems likely that decision makers sometimes behave insincerely, that is, they make choices that are not consistent with their true preferences. For example, strategic—as opposed to sincere—behavior may be aimed at taking advantage of in...
Jiawei Li11
Estimated H-index: 11
(University of Nottingham),
Philip Hingston19
Estimated H-index: 19
(ECU: Edith Cowan University),
Graham Kendall48
Estimated H-index: 48
(University of Nottingham)
In this paper, we investigate winning strategies for round-robin iterated Prisoner's Dilemma (IPD) competitions and evolutionary IPD competitions. Since the outcome of a single competition depends on the composition of the population of participants, we propose a statistical evaluation methodology that takes into account outcomes across varying compositions. We run several series of competitions in which the strategies of the participants are randomly chosen from a set of representative strategi...
Published on Jan 1, 2011
Jungwon Min1
Estimated H-index: 1
(Keio: Keio University)
Published on Jan 1, 2011
Paolo Renna15
Estimated H-index: 15
(University of Basilicata)