Co-opetition: A Revolution Mindset that Combines Competition and Cooperation is a non-fiction book on coopetition co-operative competition , business strategy , and game theory by Adam M. Brandenburger and Barry J. As of , the book is still available in its 9th printing. Coopetition or co-opetition is a neologism coined to describe the concept of cooperation between competitors. Coopetition is a portmanteau of cooperation and competition.
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At one time or another, everyone wants life to be more rational and scientific. Then we wouldn't have to spend so much late-night time on the phone with friends, playing out scenarios of the possibilities life offers. Corporate executives aren't exempt from this desire. They too spin scenarios, of the bottom-line variety. This must have been the audience Adam M. Brandenburger and Barry J. Nalebuff had in mind when they wrote Co-opetition , a book about "the game theory strategy that's changing the game of business," as they put it.
Brandenburger, a Harvard Business School professor, and Mr. Nalebuff, who teaches at the Yale School of Management, believe businesses can become more competitive by cooperating, hence the neologism "co-opetition. But it is not just any form of cooperation like choosing not to keep score in volleyball so nobody loses that will work.
The authors visualize co-opetition as a kind of judo or chess match, in which duelists use not only their own strengths but their opponents' weaknesses as they battle. The fate of one person is interdependent with the other; the move one person makes influences moves the other person will make. How to keep track of the infinite possibilities?
Game theory, say the authors, the science of strategic thinking. The Federal Communications Commission used it two years ago to devise an intricate auction of spots on the radio spectrum. The complex mathematics of game theory allows businesses that want to co-opetate—this, presumably, would be the verb form of co-opetition, since "co-opete" doesn't really work—to move beyond the binary formulation of cooperation vs.
The authors' description of game theory begins with an exercise Mr. Brandenburger does with his students at Harvard. He keeps the 26 black cards in a deck of cards and distributes the 26 red cards to the students. The professor and the students, then, have to negotiate. The only limit is that students can't bargain collectively; they have to make their own deals. Who has the upper hand? In this situation, with the variables—the number and whereabouts of the cards—all known, the decision is relatively easy.
There's no penalty for waiting to see how the negotiations play out, because they should all play out the same way. But the dynamics of the game will change if three black cards are missing and instead of 26 students and 26 deals, there will be 26 students and 23 deals. Then the balance of power tips to the person with the black cards; the red-card holder needs to make an earlier deal or run the risk of losing out.
The dynamics also change if one person has knowledge not available to others. A more prosaic instance of game theory is the old parental method of dividing up scarce resources, e. If there are two siblings, the one who doesn't cut chooses. Presumably the cutter is motivated to slice the pie into two exactly equal parts. If, however, she knows her sibling likes crust better than cherries, she may split it up in a way that doesn't look equal but works to the advantage of both siblings—i.
From these examples, it's not hard to see how game theory can get very complicated very soon. The combinations and permutations of card opportunities would very quickly get to be astronomical.
On the other hand, it's also not hard to see why much of what might be called game theory—say, the avoidance of wars between siblings—is intuitive and commonsensical. And therein lies the problem with "Co-opetition. It instructs readers to contemplate "added value" and "complementarity" as they assess opportunities. It notes that different "players" have different perceptions of the world and that a game may have a "scope" that can't quite be envisioned yet.
The professors approvingly cite, for example, a campaign by Robert Taylor, who gave the world liquid bath-and-shower soap, to establish brand loyalty for his upstart product. It's clever, it's inspiring, it makes good reading, but why is it game theory? The authors never really make clear what distinguishes game theory from good business sense.
Decision-making is looking upside, downside, matching advantage against disadvantage, marrying a weakness to a strength and occasionally doing something "counterintuitive" that actually makes complete sense in context. Since the book is full of good stories, it's hard not to recommend it, but readers looking for science are likely to be disappointed. Reviews and mentions of publications, products, or services do not constitute endorsement or recommendation for purchase.
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"Co-opetition" by Adam M. Brandenburger and Barry J. Nalebuff
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Co-opetition describes a strategic framework that enables organisations to classify relevant actors in their industry and beyond. The model uses insights from game theory to understand and influence the behaviour of these players. Based on case studies across different industries, they argued that cooperation and competition are both necessary and desirable when doing business. Cooperation is required to increase benefits to all players focus on market growth , and competition is needed to divide the existing benefits among these players focus on market share. Game theory provided the economic foundation to determine circumstances when cooperation is the preferential strategy.
Co‐opetition: Competitive and cooperative business strategies for the digital economy
Would you like to tell us about a lower price? If you are a seller for this product, would you like to suggest updates through seller support? When a business strategy is so new in design, a new word must be coined to capture its value. Such is the case with co-opetition, a method that goes beyond the old rules of competition and cooperation to combine the advantages of both.