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The dynamics of learning alliances: competition, cooperation, and relative scope
Author(s) -
Khanna Tarun,
Gulati Ranjay,
Nohria Nitin
Publication year - 1998
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/(sici)1097-0266(199803)19:3<193::aid-smj949>3.0.co;2-c
Subject(s) - alliance , scope (computer science) , competition (biology) , incentive , microeconomics , industrial organization , set (abstract data type) , investment (military) , business , economies of scope , economics , computer science , economies of scale , ecology , political science , law , biology , programming language , politics
We show how the tension between cooperation and competition affects the dynamics of learning alliances. ‘Private benefits’ and ‘common benefits’ differ in the incentives that they create for investment in learning. The competitive aspects of alliances are most severe when a firm's ratio of private to common benefits is high. We introduce a measure, ‘relative scope’ of a firm in an alliance, to show that the opportunity set of each firm outside an alliance crucially impacts its behavior within the alliance. Finally, we suggest why firms might deviate from the theoretically optimal behavior patterns. © 1998 John Wiley & Sons, Ltd.