Friday 21 July 2017

What could break a win-win cooperation?

In the real world, there are many situations when participants can benefit more from cooperation but end up competing with each other. Such phenomenon could be caused by several reasons. 

Firstly, conflict of interests can be one major reason of why many companies cannot cooperate for a stable long period. There always are conflicts of interests within companies that the interests of management can be different from the interest of ownership, and the interest of ordinary employees can be different from each other. When individuals are acting for the best of their own individual interests, as cooperation does not necessarily serve every single participant’s interest to the best, even there is cooperation, when some participants are not supporting the idea of cooperation, any accident between the cooperating parties of companies can damage and even destroy the cooperative relationship, and such accidents could even be made intentionally by some people within the two parties or companies. 

Secondly, imperfect information is another cause. Imperfect information or lack of transparency could be another cause to cooperation breakup. Due to regulations and laws, under many circumstances, the cooperating companies cannot make their information open to each other, in some cases, they cannot even tell each other they have intentions to cooperate. Therefore, under such circumstance, they could only try to understand each other by analysing the possible signals sent by their cooperative partners via the market (for example, they set new prices to send signals). However, the signals could be misunderstoodWhen a misunderstanding occurs, it is hard for the cooperating companies to continue their cooperation. 

Thirdly, individuals' expectation differences would be a major cause of cooperation breakup between either organisations or individuals. Individual person or organisation has its own expectations about itself, the environment and its potential partners and competitors. When they have different expectations about each other and themselves, they are more likely to have different strategies towards each other. If they do not have similar expectations about the future they are facing, it is difficult for them to have a base for stable and constant cooperation. They are possible to cooperate to fight against some challenges they share in the short term, but as they have different plans for their future based on their different expectations, there is less room for them to successfully cooperate with each other. 

Overall, in my opinion, a long-term stable cooperation between individuals or organisation or countries will never be possible. 

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