Competition and Cooperation in Joint Purchase Decisions

EXTENDED ABSTRACT - The concepts of cooperation and competition are fundamental to our understanding of interpersonal and inter-group relations. Cooperation exists when people work together to achieve a mutually satisfying outcome, while competition can be characterized as a zero sum game in which one person wins and the other loses (cf. Tjosvold 1984). From this perspective, consumers in a decision-making dyad cooperate when they seek a mutually satisfactory purchase outcome that reflects the preferences of both parties, and they compete when they attempt to impose their preferences on each other. Deutsch (1949) argues that the tendency to cooperate or compete depends on the nature of the interdependence between the parties. Cooperation occurs when group members are positively interdependent such that each person only achieves his or her goals if the others also achieve their goals. In contrast, competition results when the goals of the group members are negatively interdependent such that each person can reach his or her goals only if the others do not reach their goals.

Citation:

Robert J. Fisher and Yany Gregoire (2005) ,"Competition and Cooperation in Joint Purchase Decisions", in NA - Advances in Consumer Research Volume 32, eds. Geeta Menon and Akshay R. Rao, Duluth, MN : Association for Consumer Research, Pages: 311-312.

Advances in Consumer Research Volume 32, 2005     Pages 311-312

COMPETITION AND COOPERATION IN JOINT PURCHASE DECISIONS

Robert J. Fisher, University of Western Ontario

Yany Gregoire, Washington State University

EXTENDED ABSTRACT -

The concepts of cooperation and competition are fundamental to our understanding of interpersonal and inter-group relations. Cooperation exists when people work together to achieve a mutually satisfying outcome, while competition can be characterized as a zero sum game in which one person wins and the other loses (cf. Tjosvold 1984). From this perspective, consumers in a decision-making dyad cooperate when they seek a mutually satisfactory purchase outcome that reflects the preferences of both parties, and they compete when they attempt to impose their preferences on each other. Deutsch (1949) argues that the tendency to cooperate or compete depends on the nature of the interdependence between the parties. Cooperation occurs when group members are positively interdependent such that each person only achieves his or her goals if the others also achieve their goals. In contrast, competition results when the goals of the group members are negatively interdependent such that each person can reach his or her goals only if the others do not reach their goals.

An issue that has been overlooked is whether consumers make more satisfying decisions when they compete rather than cooperate. Consider the possible effects of competitive behaviors on the satisfaction of two friends in which A is the influencing agent and T is the influence target. If A and T have different preferences but A has more power, A is able to impose his or her choice on T through influence. The decision outcome should be satisfying or A, but the use of power is likely to make the decision process less pleasant for both parties than if they had worked together. In contrast, if A possesses less power than T, by definition T has the ability to resist A’s influence attempts (though he or she may choose to acquiesce). The inability to influence T is likely to lead to disappointment and frustration for A. Thus, the effects of competition on decision satisfaction are contingent on the extent to which A has more power and is able to achieve the desired outcomes (hypothesis 1).

Although power and influence constitute essential components of competitive decision environments, they are much less important in cooperative ones. If A and T work cooperatively, they will focus on achieving a mutually satisfying outcome. To do so, they must engage in a two-way exchange of information in order to generate a common understanding of the issues. They must also be responsive to each other in order to work toward an outcome that reflects the preferences of both. A and T’s relative power is largely immaterial because they are positively interdependent; in other words, A enhances his or her own satisfaction by increasing T’s satisfaction, and vice versa. Thus, we hypothesize that the effects of cooperation on decision satisfaction is always positive, regardless of the power hold by A or T and their ability to achieve the desired outcomes (hypothesis 2).

The hypotheses of this research were tested with a 2 (decision process: cooperative versus competitive) X 2 (decision outcome: preference consistent versus preference inconsistent) between- and within-subjects experimental design. Subjects were randomly selected to receive one of two scenarios containing the manipulations. The scenarios described a conversation between two managers (John and Greg) making a decision about where to take an important client for dinner. The decision process manipulation was achieved with scripts that differed in terms of the degree to which the dialogue between the managers was competitive versus cooperative. In the competition condition, one manager used influence to impose his preferences on the other. In the cooperative condition, the managers listened and responded to each other’s suggestions or arguments. In both conditions, the managers possessed different initial preferences in order to ensure that they had a basis for discussing the pros and cons of the alternatives under consideration. Decision outcome was a within-subjects factor and so subjects responded to the questionnaire from both Greg and John’s perspective. The dyadic decision was consistent with one manager’s initial preferences and inconsistent with the other’s. Data was collected from 113 MBA students under normal classroom conditions.

The results indicate that decision satisfaction is enhanced by decision processes that are characterized by the desire to achieve a mutually satisfying decision (i.e., cooperation) as opposed to the imposition of individual preferences (competition). Subjects thought that managers who cooperated were more satisfied with the dyad’s decision within both the preference-consistent and the preference-inconsistent conditions. Decision satisfaction is enhanced by a decision process in which dyad members are attentive and responsive to each other’s concerns, and where influence is attempted less frequently. Process results suggest that cooperative decision processes are viewed as fairer, less biased, more honest, more accommodative, and oriented toward mutual problem-solving.

The results related to the manipulation of decision outcome are particularly interesting. Overall, subjects thought that the managers were most satisfied when "they got their way," as reflected by a congruency between the dyadic decision and their initial preferences. However, a significant interaction between decision process and outcome revealed that preference-consistency was more important under a competitive decision process. We propose that consumers place a much greater emphasis on the degree to which an outcome is preference-consistent when they are competing, because competition is basically a zero-sum game of preference imposition. Managers who competed and "did not get their way" were thought to be extremely dissatisfied with the dyadic decision.

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