Co-operation, Competition and Market Structure from A Game-Theoretical and Austrian Perspective
Year: 2025
Type: article
Abstract: While the Austrian School emphasises entrepreneurial discovery and the evolutionary nature of competition, game theory provides structured tools for analysing strategic interactions. This paper combines both perspectives to examine how voluntary co-operation influences market outcomes. Building on game theory concepts such as Nash equilibrium, repeated games and the coopetition approach, a theoretical analysis of strategic decisions is provided. These models are then compared with the Austrian view of dynamic market processes. Case studies from the platform economy, opensource development, the blockchain sector and the pharmaceutical and financial industries show real forms of cooperation without centralised control. A game-theoretical model is developed that depicts voluntary cooperation under different competitive conditions, taking into account trust, incentives and strategic expectation formation. This model is supplemented by simulation-based approaches that examine the long-term stability of cooperative structures in decentralised markets. The results show that voluntary co-operation can generate efficiency gains, but that it is largely dependent on institutional framework conditions and the repeatability of interactions. The combination of both theoretical approaches enables a deeper understanding of market behaviour beyond static equilibrium models. Competition and co-operation are not seen as opposites, but as complementary forces that together promote innovation processes, adaptability and market stability. The paper argues in favour of adaptive, institutionally embedded regulatory approaches that allow for competitive structures and at the same time support voluntary coordination. It thus contributes to the development of theory and offers practical implications for competition policy and corporate strategy in dynamic markets.
Author: Enrico Moch
Institution: GrandEdu Research School
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4409312326