Consequences of Risk for a Start-Up Business and the Effect of External Setback on Cooperation in a Public Goods Experiment

DOI

10.2991/aebmr.k.201128.029How to use a DOI?

Keywords

Public Goods, Start-up Firms, Business Risks, Game Theory, Business Cooperation

Abstract

Every start-up business has to cope with is risky, whether it is originated internally or externally. Even if a business start-up functions without major deficiencies on the inside, external factors such as a market crash, a government fine or an attack from business competitors might seriously undermine the company’s profitability. Without the promise of profit, there is a likelihood that the external setback might challenge the cooperation among partners who together founded and invested in the start-up. This paper studies the impact of external setbacks on cooperation in business start-ups by modeling a start-up using a public goods game. Such a public goods game yields results that suggest either the total collapse of cooperation in a start-up group when confronted with an external setback large enough to eliminate profit, the full reorganization of cooperation, or merely partial recovery of cooperation.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Nanrui Gong
PY  - 2020
DA  - 2020/11/30
TI  - Consequences of Risk for a Start-Up Business and the Effect of External Setback on Cooperation in a Public Goods Experiment
BT  - Proceedings of the 2020 2nd International Conference on Economic Management and Cultural Industry (ICEMCI 2020)
PB  - Atlantis Press
SP  - 143
EP  - 146
SN  - 2352-5428
UR  - https://doi.org/10.2991/aebmr.k.201128.029
DO  - 10.2991/aebmr.k.201128.029
ID  - Gong2020
ER  -