Researchers observed a firm that must evaluate two projects as they’re developed and choose the most profitable one. The competition arises when each team wants their project to be chosen.
“We found that the optimal thing to do, in fact, looks a lot like what we see in real life,” Joyee Deb, PhD, associate professor of economics at New Haven, Conn.-based Yale School of Management and researcher on the study, told Yale Insights. “Start with an initial phase of pure competition between teams, to be always followed by a period of collaboration.”
The study found that once a decision is made, there can be no going back. If options are kept open, employees will not commit to the collaboration process because they’ll hope their project still has a chance to be chosen.
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