Abstract
Competition and cooperation are two fundamental market processes and are often viewed as independent opposites. However, there is evidence that they are interdependent, and this interdependence affects market dynamics. To understand market dynamics, we need to explicitly consider the interaction between competition and cooperation. A philosophy that might be helpful is Taoism according to which opposite elements of Yin and Yang continuously interact. The purpose of this article is to investigate how Yin–Yang principles in terms of the interaction between competition and cooperation might improve our understanding of market dynamics. The theoretical reference frame is based on a business network perspective on markets and literature on the interaction between cooperation and competition. An exploratory case study of relations between four Finnish small- and medium-sized enterprises (SMEs) is also used. Based on the Yin–Yang principles, the literature, and the case study, propositions about the nature of interaction between competition and cooperation are developed. These propositions are then used as a basis to outline further research opportunities on market dynamics.