Competitive Familiarity: Learning to Coordinate by Competing

Abstract

This paper develops and tests a theory of organizational learning, proposing that prior competitive interaction improves coordination among teammates. We test the theory using millions of experiments in the formation of eSports teams. The results show that exogenously assigned teams of former competitors are highly effective—The marginal returns to prior competitive interaction are even larger than the returns to prior collaborative interaction. The evidence suggests that teammates learn to coordinate by competing, a finding with implications for organizational design and the management of human capital. Funding: The authors are grateful to UCL School of Management and Worcester Polytechnic Institute for financial and technical support.