Partner Poaching in Managerial Decisions on Strategic Alliances

In this paper, we experimentally examine managerial behavior in forming strategic alliances given the presence of existing alliances among two or more firms. We employ a custom-designed computer game in which managers of firms in a hypothetical industry have an incentive to form resource-based coalitions that optimize profits. Across three studies, we show that managers often systematically avoid breaking or “poaching” an existing coalition that includes an attractive potential partner, even if doing so is economically advantageous. However, this tendency may be mitigated when the existing coalition is perceived as a powerful threat or when no other viable partnership options exist. The findings provide behavioral insights into managerial decisions on strategic alliances and endogenous coalition formation in cooperative games.