Competition and Cooperation: A Tradeoff?

Roberta Wiig Berg, in her paper titled “Competition and Cooperation, The Wisdom to Know When” (2010), describes a series of experiments based on the prisoner’s dilemma framework conducted by herself and her colleagues, interprets the patterns in behavior observed, and explains what drives these patterns. The model used, known as the Red-Blue exercise, facilitates in raising participants’ awareness on the present state of their minds and thought processes (176). In spite of the substantive evidence provided by Berg to explain the inclination towards competitive behaviour, I personally found the RBE model to be exceptionally simplistic and misrepresentative to a certain degree. Through this reading response, I hope to point to these limitations as well place the RBE in relation to other models based on Game Theory that have been proposed based on the prisoner’s dilemma and game theory so as to open up more avenues to understand that the nature of cooperative and competitive behaviour is contextual.

In this research paper, we find that the concepts of competition and cooperation are placed in juxtaposition to one another right at the onset, implying a trade-off between the two, leaving no room for overlap. Inconsistencies in defining cooperation and competition are found quite frequently in the fields of business and economics. This is best exemplified by the concept of “perfect competition”. This market arrangement, which is central to the functioning of various microeconomic principles, rests firmly on the assumption that producers coordinate their activity to ensure uniformity in price-output policy, and therefore presents itself as an oxymoron.

In consonance with the arguments stated by Jc Saenz, I too believe that excluding the integral role played by incentives thwarted the veracity of the results when applying them to real-life scenarios. Hence, the fact that, according to Berg (180), teams seem to have the tendency not to apply any sort of theory to their decision-making is justified, as there is neither a dire consequence for losing, nor is there a reward for winning.  Considering that business decisions are driven by the incentive to either maximize profit or maximize sales, this raises an important question- How would the behavior of the subjects of the experiment change if there was a reward or penalty involved? Related to this is the exaggeration of the supposed bitterness that participants feel toward members of the other team when the choices made do not correspond (Berg, 185). If the participants were actually self-conscious actors, the lack of incentive would leave them indifferent to the outcome as there is no net gain or net loss affiliated with it.

Furthermore, I vehemently disagree with the author’s concluding argument that competition is a reflex action. While this statement may not seem entirely baseless when considering the data provided by Berg, to say that this is true for all rational, self-interested actors is to disregard the complexity and unpredictability of human behavior. This argument, therefore, suffers from a number of empirical shortcomings. First and foremost, the assumption that players are motivated exclusively to maximize their own individual payoffs (these payoffs are utilities relative to the opposing side since no monetary reward is offered) can be contested by the Interdependence theory (Rusbult & Van Lange, 2003), which takes into account other-regarding preferences. Here, the actors are motivated to maximize their utilities, but these utilities are not necessarily individualistic (Colman and Pulford, 2012). They may be cooperative, competitive or even altruistic depending on the circumstances of the interaction.

The ideas suggested by J.V Howard (1988) and Danielson (1992) also make a case in point. In essence, they argued that rational decision makers have a reason to cooperate if they recognize that their co-players are similar to themselves. However, this concept is subject to the limitation that players must know their co-players prior to the undertaking of the game. Another concept along these lines is the Social Projection Theory (Krueger et.al), which states that in the absence of any other evidence, it is rational for players to assume that their co-players are likely to utilize the same strategies as themselves. This indicates that if one side cooperates, it is likely that the other side will do the same.

Moreover, the paper was riddled with contradictions. As mentioned by Shawnpak, the author claims that the exercise is not a contest, but later states that the aim for each group should be to end up with the highest possible score. This makes the objective of the paper somewhat unclear- Is the author trying to denounce competition? Or is the underlying objective to prove that competition is an omnipresent phenomenon? If the former is true, it makes it impossible for either team to attain the highest possible score, since “the highest” is defined relative to the score of the other team.

Overall, the RBE model presents, once again, a scenario wherein competition is prescribed more importance than necessary, not taking into account the coexistence of competition and cooperation in the realm of business. In essence, the data provided by Berg corresponds with the factors considered by Berg. Hence, while the intention (to create awareness on the participants’ disposition) is indeed noble, the purpose was not adequately met.

Image source: https://kevingnunn.files.wordpress.com/2014/06

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