A Short-term Analysis of the Motive of Strategic Cooperation of Firms under the Condition of Limited Open Competition
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Abstract:
To expose the motive of strategic cooperation of firms, a comparative analysis, of the different outcomes of the strategy of purely competition and the strategy of cooperation, had been done by the application of the Arms Race model and Insecurity Alliances model under the conditions of short-term hypothesis and limited open competition. The analysis reveals , that is the market share of the stable state when the firm joining in the cooperation is more than the one of the stable state when the firm selects purely competitive strategy, i.e., the strategic cooperation not only make the two firms, who are competitive matches, go to symbiosis, but also common stronger, and it is proved that the positive benefit come from cooperation exists. So the motive of strategic cooperation of firms comes from the cooperative benefit.
