Easy or Tough Coopetition? Perspective of Coopetitive Real Options Games

Elżbieta Rychłowska-Musiał ()
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Elżbieta Rychłowska-Musiał: Poznań University of Economics and Business

Chapter Chapter 9 in Advances in Cross-Section Data Methods in Applied Economic Research, 2020, pp 131-145 from Springer

Abstract: Abstract Cooperation between competing firms called coopetition has increasing relevance to business practice. However, firms and their managers who want to enjoy the benefits of coopetition are also aware of the risks that it entails. The key questions need to be answered: under which circumstances firms are willing to coopete and to keep the arrangement, what factors are decisive, and when benefits are most significant. In the paper, we are looking for answers to these questions on the basis of coopetitive real options games. We consider the case of two firms that can establish a coopetition arrangement to implement an investment project (each firm possesses a shared investment option). In the paper, we point out conditions under which coopetition between companies is easy, tough or impossible. The key factors are the project risk and the size of market shares. In particular, it is worth noting that for high-risk projects, the area of tough coopetition is larger than for low-risk projects. A large disproportion in market shares makes coopetition rather impossible.

Keywords: Real options games; Investment option; Coopetition; L13; L14; G11 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:spr:prbchp:978-3-030-38253-7_9

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DOI: 10.1007/978-3-030-38253-7_9

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