Value Creation and Value Appropriation in Strategic Alliances: An Experimental Study of Coopetition

Strategic alliances are coopetitive in nature as they incorporate both cooperation and competition: partners cooperate for joint value creation while simultaneously compete to appropriate the co-created value. We study this tension both theoretically and experimentally by modeling coopetition as the interaction between two players. Contrary to the game-theoretical analysis and to the conventional wisdom, the experiment results demonstrate that competition beyond alliance scope does not undermine value creation within the alliance. Instead, initial experiences significantly impact on alliance performance and sustainability, even facing market condition change. The study makes one of the first attempts to employ the experimental method to enrich our understandings on coopetition from the value creation and value appropriation perspective.