Learning from game theory
Research by Silico Research and IBM1 has found that a respondent's assessment of the partner's openness to knowledge sharing and new ideas, and the cultural compatibility between the two partners showed a strong correlation with the success of the partnership as reported by the respondent.
Why would the partner's openness to knowledge sharing and new ideas play a more important role in the respondent's assessment of the success of the alliance than, for example, the quality of the partner's staff or the partner's delivery on commitments?
A number of things seem to be happening here. First, the respondents place a particularly high premium on knowledge sharing because this sends signals to the respondent that the partner places a high value on the partnership and the relationship over and beyond the strict terms of the contract. Second, a flow of ideas back and forth between the parties leads the respondent to believe that further value may arise out of the partnership through new opportunities or new partnerships. Third, knowledge sharing between the parties and an openness to new ideas means that the respondent is led to believe that the partner is more likely to take an open approach to any problems that may subsequently arise in the partnership.
These findings are in line with game theory that now accepts that in a situation of co-operation, including commercial partnerships, the stability of the relationship is enhanced by sharing information and by treating information as a communal asset. On the other hand the relationship is destabilized by asymmetrical information, in other words where one party treats information as an asset to be hoarded. In such situations conflict is more likely to occur.2 The Prisoner's dilemma, as originally framed by Merrill Flood and Melvin Dresher, shows that co-operation and information sharing is a rational strategy only in situations where the party sharing information believes that the other party will also co-operate and share information to the same extent. Otherwise the most rational strategy would be to withhold information and gamble that the other party will put himself at a disadvantage by sharing information. This demonstrates the fundamental importance of trust between parties to successful partnerships.
1. BioPartnering 2006, Silico Research and IBM Business Consulting
2. Chen F and Fan L (2006), Analysis on stability of strategic alliance: A game theory perspective, Journal of Zhejiang University, 2006 7(12):1995-2001
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