We Tried Cooperating Once

The owner of a small bio-processing firm had tried to collaborate with a competitor once, but swore never to do it again; the other company had taken advantage of the partnership, and hadn't shared anything in return.

Many people use this kind of story as justification for avoiding collaboration - "once burned, twice shy" as the old saying goes. Yet research and evidence from the real world and the lab clearly show that cooperation is a more efficient strategy for success.

Companies look for market niches, areas where they can avoid the high costs of competition. Companies work to create industry standards, so everyone can agree on the basics and move forward efficiently. Companies form consortiums, to share resources and achieve things together that they'd be unable to do on their own. Judged purely by self-interest, greedy strategies tend to do very poorly in the long run while more altruistic strategies do better.

Perhaps a better approach to being "once burned" then is the tit-for-tat strategy - the most successful strategy in the fascinating Prisoner's Dilemna Game. In this approach, you assume the other person is "nice" the first time you play. Then, if they act greedily, you reciprocate and act greedily in your next encounter. If they then play nice, you can again play nice. In this way, you are open to the mutual benefits of cooperation, but protect yourself from an abusive, greedy partner.

So, don't let one failed collaboration turn you off. Work together, whenever you can, and use a tit-for-tat strategy to protect yourself from companies that don't know how to play nice.