The evolution of cooperation in the face of conflict: Evidence from the innovation ecosystem for mobile telecom standards development

Abstract

Research Summary How does interfirm cooperation in innovation ecosystems evolve in the face of conflict? We theorize that conflict propels firms to reconfigure cooperative relationships while maintaining and even increasing cooperation with aggressors because cooperation is the primary mechanism for value creation in such ecosystems. To empirically test our arguments, we study patent litigation and subsequent cooperation between mobile telecommunications firms within the 3GPP standards development organization. We find evidence of a dual cooperative strategy in the face of conflict: while cooperation increases between litigants, defendants also enhance cooperation with others to steer standards away from aggressors. We also highlight the contingent roles of technological complementarities and relational position underpinning cooperation after conflict. Our findings demonstrate that in innovation ecosystems, cooperation with adversaries persists despite conflict. Managerial Summary Firms in innovation‐driven industries cooperate to develop interoperability standards and compatible technologies. Yet, cooperative firms may disagree about what constitutes fair, reasonable, and non‐discriminatory terms for licensing intellectual property. Thus, conflict and patent litigation arise even as firms cooperate to build technologies and industry standards. We find that in innovation ecosystems, firms commonly increase cooperative efforts in response to conflict. Less‐connected firms or those with valuable complementary technologies will likely expand cooperation than well‐connected firms or technological competitors. Well‐connected firms may pursue alternative cooperative opportunities. We suggest that defendant firms' managers can adopt a dual cooperative strategy: (a) identify private and shared benefits from the joint development of complementary technologies with aggressors and (b) invest in alternative technological partnerships to influence the direction of future standards development.

Cooperation and Competition in the Innovation Ecosystem From the Perspective of Evolutionary Psychology

“…In an innovation ecosystem, cooperation among innovation agents is the basis for ensuring smooth operation of the system. Cooperation is the main mechanism for creating value in the innovation ecosystem ( Jones et al, 2021 ); its purpose is to enable agents to pursue common interests ( Hannah and Eisenhardt, 2018 ). A major feature of the innovation ecosystem is complementarity among innovation subjects.…”

“…Therefore, in an innovation ecosystem, the relationship between cooperation and competition presents a dynamic balance. Researchers have found that competitive innovation agents and companies tend to continue to cooperate: the greater the expected level of benefit for the innovation agent, the greater the possibility of the firm maintaining cooperation in the presence of competitive conflicts ( Jones et al, 2021 ). The innovation ecosystem is a dynamic and complex innovation network composed of complementary core enterprises and upstream and downstream suppliers.…”

“…Only by paying attention to the mechanisms of cooperation and competition among factors can knowledge and resources in the innovation ecosystem be absorbed, transformed and moved more efficiently, thus producing efficient innovation organisations and improving the economic performance of enterprises. Therefore, cooperation and competition among various elements in the innovation ecosystem are the core factor in realising value co-creation and innovation breakthroughs ( Jones et al, 2021 ). Cooperation and competition have always been accompanied by the evolution and development of human beings, which is the key theme of evolutionary psychology research.…”

Evolutionary game analysis of environmental pollution control under the government regulation

“…For example, solving the collective-risk social dilemma 10 ; optimal institutional incentives 11 ; prosocial punishment 12 ; incentives for cooperative governance of risky commons 13 ; and so on.Smith was the first to study evolutionary games 14 . Later, some scholars extended the model 15 , 16 to simulate the cooperative evolution of biological populations. Evolutionary game theory holds that the game subjects have bounded rationality, it is difficult to choose the optimal strategy of a single game, and through continuous trial and error and imitation to achieve evolutionary stability 17 .…”

Building and sustaining innovation ecosystems

“…Furthermore, the literature theorizes on how focal actors manage their symbiotic relationships with competitors via coopetitive strategies (Planko et al, 2019) and thus address their coopetitive co-evolution challenges. On the one hand, focal ventures apply defensive strategies to collaborate with existing competitors and create mutual market areas, especially when their complex innovations are new to the market (Jones et al, 2020). They can also use offensive strategies to protect their market share and position by deliberately igniting price wars or setting higher market entry barriers .…”