Deceptive behaviour and coopetition: the role of heterogeneous absorptive capacities and product specialisation

Abstract

Purpose This paper aims to study the role of absorptive capacities in coopetitive alliances that involve leakages of sensitive private knowledge regarding firms’ production processes. Design/methodology/approach This paper uses a game theoretic approach to model a differentiated product market in which two firms asymmetrically informed about the economic value of a business opportunity must cooperate to exploit this opportunity. Under coopetition, firms gain access to their partners’ core knowledge as the result of inevitable leakages of information. Firms differ in their absorptive capacities, which affects their abilities to leverage this new knowledge outside the collaborative activity. Findings Firms with superior absorptive capacities are more likely to devise alliances whose purpose is to gain access to their partners’ core knowledge. This opportunistic behaviour does not disappear even if firms compensate their partners for the damages caused by this deceptive business practice. This paper also finds that a highly specialised product safeguards firms with limited absorptive capacities against these opportunistic behaviours. Originality/value This paper provides a theoretical analysis of the role that absorptive capacities and product specialisation play in influencing the emergence of opportunistic behaviours in coopetitive alliances. The theoretical analysis underscores the extent to which the risk of opportunism associated with the exploitation of a partner’s specific core knowledge outside the scope of the cooperative activity affects not only the nature and intensity of market competition but also the incentives to pursue coopetitive alliances.