Finalist for the Louis R. Pondy Best Paper Based on a Dissertation Award
Cooperation requires that exchange partners arrive at a mutual understanding of what cooperation means – i.e., the specific actions that constitute cooperation and defection. Absent such shared understandings, cooperative actions may be interpreted as defection, leading to the termination of the exchange. While previous research found shared understandings are present in long-term relationships, it leaves a crucial question unanswered: if relationship longevity breeds shared understandings of cooperation, how can new exchange relationships, lacking such understandings, survive into longevity? This paper proposes and validates a general process enabling exchange partners to arrive at a shared understanding of what cooperation means in changing and complex environments, thereby fostering both cooperation and long-term exchange: low-stakes joint problem-solving. The analysis differentiates between two contexts: one in which exchange partners can rely on established, pre-existing, commonly known understandings of cooperation and one in which they must jointly develop new relationship-specific ones. A set of online experiments validates the key theoretical implication. When established understandings are unavailable, low-stakes joint problem-solving helps forge mutual understandings that support cooperation and long-term exchange. By contrast, when relationships are not needed to develop mutual understanding, joint problem-solving (and long-term exchange may not be valuable for supporting cooperation.