Co-Opetition - Adam M. Brandenburger [2]
The best way to do this will obviously be different for different businesses. But one strategy that Co-opetition emphasizes is working with what we term “complementors.” A complementor is the opposite of a competitor. It’s someone who makes your products and services more, rather than less, valuable. Not surprisingly, the complementor concept is especially relevant to the builders of the Information Economy. Hardware needs software, and the Internet needs high-speed phone lines. No one, alone, can build the infrastructure for the new economy. It’s a whole new system made up of many complementary parts.
Thinking about the new economy, we’ve realized that there’s a deeper connection here, a connection through one of the great intellectual figures of this century, John von Neumann.
John von Neumann—mathematician, genius, polymath—died in 1957, well before he could see the emergence of the Information Age he helped create. He was a co-inventor of the modern computer architecture—today’s programmable computer. He also did pioneering work on self-reproducing systems, presaging the discovery of DNA. And, together with economist Oskar Morgenstern, he was the inventor of game theory. His theory of games provides a model of the pie, and how it gets divided up. We rely on these insights throughout Co-opetition.
Game theory is a different way of looking at the world. Conventional economics takes the structure of markets as fixed. People are thought of as simple stimulus-response machines. Sellers and buyers assume that products and prices are fixed, and they optimize production and consumption accordingly. Conventional economics has its place in describing the operation of established, mature markets, but it doesn’t capture people’s creativity in finding new ways to interact with one another.
In game theory, nothing is fixed. The economy is dynamic and evolving. The players create new markets and take on multiple roles. They innovate. No one takes products or prices as given. If this sounds like the free-form and rapidly transforming marketplace, that’s precisely why game theory may be the kernel of a new economics for the new economy. And that is why we see Co-opetition as a book for the Information Age.
Traditionally, a book has been a static and one-way medium. Fortunately, that’s changing. Like many authors, we’ve been able to use the Internet to make our interaction with readers more dynamic and interactive. On the Co-opetition home page, you’ll find updates, articles, some interactive exercises, overheads, audio, and a convenient way to E-mail us. Since the book first came out, we’ve learned a great deal from a great many people about how and where they’ve been putting Co-opetition to work. Our heartfelt thanks to all of them. We hope you’ll share your reactions with us, too.
Adam Brandenburger (abrandenburger@hbs.edu)
Barry Nalebuff (barry.nalebuff@yale.edu)
April 1997
http://mayet.som.yale.edu/coopetition
(We try to respond to all E-mails, although we have been known to fall behind.)
Production Notes
The combination of theory and practice you’re about to read has taken many years to develop. Throughout these years we have received enormous help from people in the academic and business worlds and from friends and family. Our personal and intellectual debts are numerous and large.
We were each lucky enough to have unusually brilliant and inspirational teachers to initiate us into the field of game theory. Louis Makowski showed Adam the value of looking at everything from unusual angles. Bob Aumann taught Adam to think hard in order to make things simple. Bob Solow, a disarmingly modest Nobel laureate, taught Barry the power of asking the right questions. The exuberant intellectual curiosity of Joe Stiglitz and Richard Zeckhauser inspired Barry to explore the wider applications of game theory.
Over the years, our research has been supported by the Harkness Foundation, the Harvard Business School Division of Research, the Harvard Society of Fellows, the National