Question · Competition
When should I compete vs. cooperate?
The Short Answer
Compete when you're fighting for the same scarce resource and cooperation wouldn't increase the total available. Cooperate when the combined value exceeds what either party could capture alone, and when cheating can be detected and punished. Most business relationships involve elements of both.
Biological Insight
Mutualism (cooperation) is ubiquitous in nature - from mitochondria inside cells to mycorrhizal networks connecting trees. It evolves when: (1) both parties benefit more from cooperation than competition, (2) cheaters can be identified and excluded, and (3) the relationship can persist over time. Pure competition is actually rarer than it appears - even competitors often cooperate on standards, lobbying, or ecosystem development.
Key Questions to Ask Yourself
- Is this zero-sum (one winner) or positive-sum (cooperation expands the pie)?
- Can you detect if the other party defects?
- Is this a one-time interaction or repeated game?
- What's the cost of being exploited vs. the benefit of successful cooperation?
- Are there ways to structure cooperation that make cheating unprofitable?
Common Mistakes
- Assuming all business is zero-sum competition
- Cooperating without mechanisms to detect or punish defection
- Competing on fronts where cooperation would benefit both parties
- Not recognizing that cooperation often requires ongoing investment to maintain