Prisoner’s dilemma payoff structure in interfirm strategic alliances: An empirical test

Interfirm strategic alliances (ISAs) are proliferating rapidly. The mixed motive-competitive and cooperative-nature of ISAs is hypothetically captured by the prisoner’s dilemma (PD) model. Until now, empirical research in realistic business settings into the payoff structure obtained in ISAs has been lacking. After examining the incentives inherent in the PD payoff structure, this study presents the results of a U.S. nationwide mail survey of 342 senior executives recently involved in ISAs. The results corroborate the existence of a payoff structure which satisfies the PD payoff structure. Some implications for promoting cooperative behavior as well as future research directions are discussed.