The evolution of non‐cooperative behaviour: the case of post‐transitional Estonia

Purpose – The purpose of this paper is to explain the emergence of non‐cooperative behaviour after the economic transition in Estonia. Design/methodology/approach – The paper uses a combined research design, in that evolutionary game theory and network segregation models are enriched with semi‐structured interviews. Simulations are used to deal with analytical complexity; in this case a prisoners' dilemma situation is used and randomness is created through the exogenous shock of opening the network to “aliens”. Findings – Consequently, it is found that individuals in large and small communities differ in their behavioural strategies: in an open community, players are more self‐interested and reciprocate only benevolent behaviour; in a regular community, people rely on cooperative social norms. Case specific information leads to the suggestion that in open networks people behave cooperatively only in teams of up to four members. Increasing the random connections in a network makes people use group segregation – that is, they behave cooperatively in regular connections and in a self‐regarding manner towards others. Research limitations/implications – The method brings certain limitations to the implications of the results – simulations are sensitive to the initial conditions set up using qualitative data. Practical implications – In managerial areas the results can provide at least two insights. First, it is obvious that only small teams (with personal connections) can be fully cooperative. In this case, the ideal number of co‐operators is four. In larger teams, individuals find it more profitable to segregate an inner circle and others. Second, if players are interpreted as firms, then competition between firms will prevail even in small communities (where new players can penetrate the market) and thus any cartel or other cooperative action will fail. Originality/value – The main value of the research is twofold: it allows to introduce the combined research methodology and explain the mental change after transition in the 1990s. The first enables to reduce the methodological impediments researchers find in the qualitative‐quantitative dichotomy. The second explains the emergence of, and changes to, the behavioural or moral codes as a result of rational social learning.