Doctoral Dissertation Research: The Emergence of Cooperation in Competitive Economic Environments

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Mark GranovetterDenis TrapidoStanford UniversityIt is puzzling that competition can affect relations among economic actors in very different ways. It isolates some actors from each other, and in more drastic cases, it alienates -- breeds hostility and distrust and entraps them in escalating rivalry. But for other actors, the same apparent situation of competition has the opposite effect: it brings them together. It stimulates personal contacts and information exchange and helps actors see opportunities for cooperation. Why such different outcomes? To understand this, the dissertation student will conduct structured interviews with senior managers and scientists in San Francisco Bay Area's drug development industry. The project strives to include all such Bay Area companies. What determines whether competitors tilt toward isolation and alienation or, on the contrary, toward communication and cooperation, has profound consequences for innovating firms in competitive environments. Ethnographic evidence suggests that social and collaborative relations with competing industry peers give innovating firms and entire industrial regions a strong developmental advantage. By contrast, firms that do not communicate or cooperate with competitors are often unable to evaluate the merits of ideas, which makes them stick to badly conceived projects or fail to recognize promising ones. Understanding why some firms end up isolated from competitors while others forge social connections and cooperation has practical implications for managers and designers of local and regional development policies. Publication of results in scholarly as well as wider circulation outlets should contribute to a lively ongoing public debate as to what policies best serve the advancement of existing or potential industrial regions.