Authors: Willem Burgers
Addresses: China Europe International Business School, 699 Hongfeng Road, Pudong, Shanghai 201206, P.R.C.
Abstract: Cooperation among partners is rapidly becoming the new norm of life, including business life. In this paper we show how a formula designed to calculate the better choice between cooperation and cheating offers insight on the balance between the benefits of cooperation on the one hand and obstacles to cooperation, namely, greed and fear, on the other hand. The formula is applied in an experiment with Chinese MBA students deciding on whether or not to keep a promise to build a warehouse for a business partner. The results of the experiment show that, rather than greed, fear of being cheated is the single most important variable explaining a decision to break a promise. The results also show that the Chinese students were not more likely to keep a promise made to a Chinese company than to a foreign company.
Keywords: cooperation; trust formula; China; experiment; game theory; business partnerships; joint ventures; greed; fear.
International Journal of Management and Decision Making, 2007 Vol.8 No.2/3/4, pp.232 - 240
Available online: 10 Mar 2007 *Full-text access for editors Access for subscribers Purchase this article Comment on this article