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Additional resources for Breaking out of the Innovation Box - Wolpert
And while there is a suggestion from game theory that good will out, it is unclear to what extent this theory can describe the total working of the global market in perpetuity. This is because while evolution favours co-operative strategies, these require agents to adopt them consciously – or at least visibly – and, as noted above, to be influenced by the likelihood of future 42 Capitalism’s Toxic Assumptions meetings to continue to behave well. The reality of the modern market makes creating this necessary ‘shadow of the future’ simultaneously much harder and much easier.
In Scotland, the Glen Ord distillery carries out malting for a large number of competing malt whiskies for the same reason, and many aggregate companies collaborate in optimising loads to keep delivery costs down. Research and development is another area where co-operation is often found, as long as the relevant regulator is convinced that the benefits of it outweigh any resulting weakening of competition. For example, in the automotive industry, it is common for competitors to share knowledge and expertise regarding fundamental pieces of design work that would be hard to amortize over their own expected volumes.
Interestingly, the UK government’s recent review of competition arrangements offers an insight into what companies might do to reap the benefits of co-operation without falling foul of existing regulation. In re-examining the criminal cartel offence, the government has decided to redefine the offence to replace the ‘dishonesty’ test with a ‘secrecy’ test. Cartel behaviour – price-fixing, agreements to limit supply or production, noncompete agreements or bid-rigging – is still an offence under competition law, with a fine of up to 10 per cent of turnover.