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

Bernhard Ganglmair (), Alex Holcomb () and Noah Myung ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

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.

Keywords: knowledge diffusion; information sharing; reciprocity; collective innovation; R&D; conversation; experimental economics; centipede game (search for similar items in EconPapers)
JEL-codes: C72 C91 D8 O33 (search for similar items in EconPapers)
Pages: 55
Date: 2018-09
New Economics Papers: this item is included in nep-exp and nep-gth
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2018_040

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