How to Build International Dual-Degree Partnerships at Universities

Why do some inter-institutional collaborations endure for twenty years and produce thousands of joint-degree graduates, while others fade into oblivion after a memorandum of understanding is signed? During my tenure as MBA Director and Master of Finance Director at the Zhejiang University International Business School, I helped drive the dual-degree Master of Finance program between Zhejiang University and the Chinese University of Hong Kong, as well as the collaboration between Zhejiang University and the Australian National University's College of Business. These experiences gave me a profound realization: successful inter-institutional cooperation is not merely the product of a signed agreement, but rather a carefully designed repeated game. It is about how trust is built through multiple interactions, how commitments are conveyed through observable actions, and how institutions transform fragile personal relationships into robust organizational networks.

I. Complementary Assets: The Economic Foundation of Cooperation

Any successful strategic alliance must be built upon clear complementarity. David Teece argued in his seminal paper that to profit from innovation, firms often need to combine "complementary assets"—resources that the innovator lacks but are indispensable for commercialization.^[1] This concept applies equally to academic institutional partnerships.

Take the dual-degree Master of Finance between Zhejiang University and the Chinese University of Hong Kong as an example. The complementarity between the two sides is unmistakable:

• Hong Kong: An international financial center, common law system, internationally recruited faculty, global financial networks, and close ties to European and American capital markets
• Hangzhou / Zhejiang University: A fintech powerhouse (home to unicorns like Ant Group, Alipay, and MYbank), firsthand access to the Chinese market, a frontier of technological innovation, and an extensive entrepreneurial alumni network

This complementarity means that the value created through cooperation (V_AB) exceeds the sum of the value each party can create independently (V_A + V_B):

V_AB > V_A + V_B

This seemingly simple inequality is the mathematical expression of "1+1>2." Economists call this "superadditivity," and it is the necessary condition for any alliance to exist.^[2] If cooperation cannot generate additional value, neither party has an incentive to collaborate.

However, the existence of complementarity is a necessary condition, not a sufficient one. Many potential collaborations with obvious complementarity ultimately fail to materialize because transaction costs are too high, trust cannot be established, or negotiations break down. This is precisely where game theory provides valuable insights.

II. The Nash Bargaining Solution: A Mathematical Basis for Win-Win Outcomes

When two institutions decide to cooperate, the core question they face is: how should the "surplus" created by the partnership be distributed? In 1950, mathematician John Nash proposed an elegant answer—later known as the "Nash Bargaining Solution."^[3]

Suppose institutions A and B enter negotiations. If negotiations fail, A's utility is d_A (the disagreement payoff) and B's is d_B. If negotiations succeed, A's utility is U_A and B's is U_B. Nash proved that, given certain axioms (Pareto efficiency, symmetry, independence of irrelevant alternatives, and affine invariance), the unique bargaining outcome is the point that maximizes the following product:

max (U_A - d_A)(U_B - d_B)

The intuitive meaning of this formula is that the product of each party's "net gain" from cooperation (the portion exceeding their non-cooperation payoff) should be maximized.^[4] This implies:

1. Bargaining power depends on "outside options": The higher one's d value (the better off one is without the deal), the stronger one's bargaining power
2. Both parties must benefit: If U_A < d_A or U_B < d_B, negotiations will inevitably collapse
3. The surplus should be "fairly" distributed: In symmetric cases, both parties split the surplus equally

The practical implication of this framework is clear: when drafting a cooperation proposal, you must answer two questions—(1) What can the other party gain from this collaboration? (2) What alternative options does the other party have if they do not partner with you? If you cannot make the other party's U_B significantly greater than their d_B, the partnership will be difficult to establish.

Drawing on my experience promoting the collaboration between Zhejiang University and the Australian National University's College of Business, ANU's "outside options" were quite rich—they could partner with any top business school worldwide. Therefore, in my initial outreach, I had to clearly articulate the unique value that Zhejiang University could offer: a gateway to the Chinese market, corporate connections with tech giants like Alibaba, and research strengths in fintech. These were "complementary assets" that ANU would find difficult to obtain through other partnerships.^[5]

III. Repeated Games and the Construction of Trust

The structure of a one-shot game differs fundamentally from that of a repeated game. In the famous Prisoner's Dilemma, the Nash equilibrium of the one-shot game is mutual defection. However, if the game is infinitely repeated (or the end date is uncertain), cooperation can become an equilibrium strategy.^[6] Robert Aumann received the 2005 Nobel Prize in Economics for his contributions to repeated game theory—he proved the "folk theorem": in repeated games, any outcome that is better for both parties than the Nash equilibrium of the stage game can be sustained as an equilibrium.^[7]

The implications for inter-institutional cooperation are profound: trust is not a moral virtue but an equilibrium outcome of repeated interaction. When both parties expect ongoing future interactions, the short-term gains from defection are offset by the long-term losses of forfeited cooperation.

Mathematically, the condition for stable cooperation can be stated as follows. Assume:

• The payoff from cooperation each period is C
• The one-time payoff from defection is T (T > C)
• The payoff after retaliation for defection is P (P < C)
• The discount factor is δ (0 < δ < 1), reflecting how much future payoffs are valued

If both parties adopt a "tit-for-tat" strategy—cooperate until the other party defects, then retaliate forever—the condition for stable cooperation is:

C + δC + δ²C + ... ≥ T + δP + δ²P + ...

Simplified:

C/(1-δ) ≥ T + δP/(1-δ)

Further rearranged:

δ ≥ (T - C)/(T - P)

This inequality tells us that when the discount factor δ is sufficiently high (i.e., both parties value the future enough), the short-term gain from defection (T - C) is small enough, or the punishment for defection (T - P) is severe enough, cooperation is a stable equilibrium.^[8]

In practice, this means that the design of inter-institutional cooperation should:

1. Extend the time horizon: Sign long-term framework agreements rather than one-off projects
2. Increase the frequency of interaction: Regular meetings, joint seminars, and personnel exchanges
3. Establish observable actions: Ensure both parties can monitor whether the other is fulfilling its commitments
4. Create exit costs: Invest in relationship-specific investments

When driving dual-degree partnerships, I deliberately adopted a "small steps, fast pace" strategy: starting with a single guest lecture, then a short-term visit, followed by a joint course, and ultimately a full dual-degree program. Each step served as a "cooperation test," allowing both parties to build trust in a low-risk environment. This is the logic of repeated games—through multiple interactions, cooperation becomes a self-enforcing equilibrium.^[9]

IV. Focal Points and Coordination: Why "Dual Degrees" Are a Natural Form of Cooperation

Thomas Schelling introduced the concept of "focal points" in The Strategy of Conflict: in games with multiple equilibria, players naturally converge on certain "salient" solutions.^[10] This explains why international cooperation between universities tends to take similar forms—student exchanges, joint research, and dual-degree programs.

There is an institutional economics logic behind why "dual degrees" have become a focal point:

• Observability: A dual degree is a clear output, making it easy to demonstrate cooperation outcomes to external stakeholders
• Reciprocity: Both parties "contribute" a degree, avoiding the dilemma of one-sided concessions
• Standardization: Degrees are a globally recognized "currency," which lowers negotiation costs
• Institutional isomorphism: There is a high degree of organizational similarity among universities, making dual degrees a "natural" mode of collaboration^[11]

DiMaggio and Powell's theory of "institutional isomorphism" explains this phenomenon: organizations facing similar environments tend to adopt similar structures and practices.^[12] This operates through three mechanisms:

1. Coercive isomorphism: Pressure from regulatory bodies, such as ministry of education standards for degree conferral
2. Mimetic isomorphism: Imitating "successful" practices under uncertainty, such as emulating the dual-degree models of top universities
3. Normative isomorphism: Professional community norms, such as the internationalization requirements of business school accreditation bodies (AACSB, EQUIS)

This means that when you propose a "dual-degree partnership," the other party does not need to invest significant cognitive resources to understand what you are proposing—it is a widely recognized "coordination focal point." Conversely, if you propose an entirely new form of cooperation, even if it might be more efficient in theory, the negotiation costs will increase substantially.

V. Commitment Mechanisms: The Signaling Value of an MoU

A Memorandum of Understanding (MoU) is typically not legally binding—so what is its value? From a game-theoretic perspective, an MoU is a "commitment device"—it constrains both parties' behavior through public declaration.^[13]

Thomas Schelling observed that the credibility of a commitment depends on the extent to which one has "burned one's bridges."^[14] An MoU is effective not because a court would sanction a breach, but because:

1. Reputational cost: Failing to honor a signed agreement damages institutional reputation
2. Internal coordination: An MoU signals to internal stakeholders (faculty, administrators, students) that "this is serious"
3. Resource mobilization: A formal agreement enables the pursuit of internal budgets and personnel
4. Third-party endorsement: MoU signing ceremonies typically involve senior leadership, which raises the political cost of reneging

Spence's signaling theory further illuminates the value of an MoU:^[15] under conditions of information asymmetry, one party can convey private information through a "costly signal." The MoU process itself—involving multiple rounds of negotiation, executive approval, and a public ceremony—is a costly signal that communicates the private information that "we are serious."

However, I have observed an interesting phenomenon: the real value of an MoU often lies not in external commitment but in internal coordination. Within the complex administrative systems of a university, advancing an international collaboration requires coordination across multiple departments—the international office, the academic affairs office, the graduate school, the college, and the department. A formal MoU can align dispersed stakeholders around a common direction, and that is its most important function.

VI. The Stage-by-Stage Evolution of Cooperative Processes

Yves Doz and Gary Hamel proposed in their classic work Alliance Advantage that strategic alliances evolve through predictable stages.^[16] Based on my practical experience, inter-institutional academic cooperation can be divided into five stages:

Stage One: Point-to-Point Contact

Cooperation begins with a personal connection between two individuals—typically two professors. This may originate from an encounter at an academic conference, shared research interests, or an introduction through an alumni network. At this stage, the collaboration depends entirely on personal relationships and is extremely fragile.^[17]

My collaboration with the Chinese University of Hong Kong actually began with a "cold outreach." I proactively contacted a professor there and invited him to participate in a major academic symposium we were hosting. The design of this invitation was critical—it gave the other party the opportunity to experience Hangzhou's digital economy ecosystem and Zhejiang University's academic environment firsthand, rather than merely discussing possibilities on paper.

Stage Two: Exploratory Engagement

After initial contact, both parties enter an "exploratory phase"—reciprocal visits, lectures, and informal meetings. The purpose of this stage is to: (1) understand each other's genuine needs and capabilities, (2) assess cultural compatibility, and (3) identify potential forms of cooperation.^[18]

Ring and Van de Ven's research suggests that the most critical element at this stage is the formation of a "psychological contract"—an implicit understanding that both parties develop regarding each other's expectations.^[19] This understanding often predicts the success or failure of a partnership more accurately than any formal contract.

Stage Three: Executive Sponsorship

Once exploratory work at the faculty level gains traction, senior leadership must be brought in—deans, vice-presidents, or even university presidents. This is not merely about securing resources; more importantly, it provides "political cover"—empowering frontline staff to invest their time and energy.^[20]

The signing of an MoU typically occurs at this stage. As discussed earlier, its function is primarily signal transmission and internal coordination.

Stage Four: Joint Production

After a formal agreement is signed, both parties enter substantive cooperation—co-teaching courses, conducting joint research, and co-hosting conferences. The challenge at this stage is "inter-organizational learning": how to strike a balance among different administrative systems, academic cultures, and teaching styles.^[21]

Hamel emphasized that alliance learning is "competitive learning"—both parties are absorbing knowledge from each other while simultaneously protecting their own core competencies.^[22] This is a delicate balance.

Stage Five: Institutionalization

The most successful collaborations eventually become "institutionalized"—no longer dependent on specific individuals, but part of routine organizational operations. This requires:

• Establishing dedicated units or positions (e.g., "Dual-Degree Program Director")
• Developing standard operating procedures (SOPs)
• Incorporating the collaboration into performance evaluation and resource allocation
• Cultivating a "second generation" of collaboration champions

Zucker's research indicates that institutionalization involves "taken-for-grantedness"—when a collaboration is regarded as "natural" rather than a "special arrangement," it acquires the resilience to withstand environmental changes.^[23]

VII. Boundary Spanners: Who Serves as the Bridge?

Organizational theory offers an important concept: the "boundary spanner"—an individual capable of navigating between different organizations, translating, and coordinating.^[24] In inter-institutional cooperation, the role of the boundary spanner is critical.

Aldrich and Herker identified two key capabilities that boundary spanners must possess:^[25]

1. Information processing: Collecting, filtering, and interpreting information from the external environment
2. External representation: Representing the organization in interactions with external stakeholders

In my experience, successful boundary spanners tend to share the following characteristics:

• Dual identity: Connections to both institutions (e.g., having studied or worked at the partner institution)
• Cultural fluency: The ability to understand and "translate" between different organizational cultures
• Low threat profile: Not perceived as a competitor or a threat
• Patience and persistence: Willingness to handle tedious administrative details

Finding the right boundary spanner is often the key determinant of a collaboration's success or failure. This person is not necessarily the most senior or well-known professor, but rather the one best able to bridge the cultural gap between the two organizations.

VIII. Relational Contracts: Implicit Agreements Beyond Formal Contracts

Oliver Williamson's transaction cost economics teaches us that when transactions involve "asset specificity," uncertainty, and frequent exchange, market mechanisms are supplanted by "hierarchy" or "hybrid" forms.^[26] Strategic alliances are precisely such a hybrid form—situated between market and hierarchy.

However, Williamson's framework assumes that contracts are "complete," whereas in reality, inter-institutional cooperation involves a vast number of situations that cannot be anticipated or formally specified in advance. This is where MacNeil's concept of the "relational contract" applies.^[27]

The characteristics of relational contracts include:

1. Long-term orientation: Both parties expect the relationship to continue, and are therefore willing to make short-term concessions
2. Flexibility: Terms can be adjusted as circumstances change, rather than being rigidly enforced
3. Mutuality: Both parties contribute and receive, rather than one-sided performance
4. Trust: Reliance on the other party's goodwill rather than legal sanctions

Baker, Gibbons, and Murphy's research demonstrates that relational contracts can resolve "incentive problems" that formal contracts cannot address—because they rely on "self-enforcement" rather than court enforcement.^[28] This echoes the logic of repeated games discussed earlier: when both parties anticipate long-term interaction, cooperation becomes the equilibrium strategy.

In practice, maintaining relational contracts requires:

• Regular informal communication (e.g., annual dinners, social events)
• Respect for the "spirit" rather than the "letter" of agreements
• Providing flexibility when the other party encounters difficulties
• Avoiding short-sighted behavior that "takes advantage" of the other party

IX. Network Effects and the Positive Externalities of Alumni Networks

In economics, "network effects" refer to the phenomenon whereby a product or service becomes more valuable as the number of users increases.^[29] This concept applies equally to academic collaborations.

The value of a dual-degree program derives not only from the curriculum itself but also from the "alumni network" it creates. Each graduating class builds connections across two cities—Hangzhou and Hong Kong, Hangzhou and Canberra. As the number of graduates grows, the value of this network increases exponentially.^[30]

This creates a "positive feedback loop":

1. The dual-degree program attracts outstanding students
2. Outstanding graduates become successful alumni
3. Successful alumni enhance the program's reputation
4. An enhanced reputation attracts more outstanding students

This network effect also creates "switching costs"—once both parties have invested years in building an alumni network, the cost of terminating the collaboration becomes prohibitively high. This is the foundation upon which relational contracts become "self-enforcing."

X. How to Write a Cooperation Email from the Other Party's Perspective

Theory aside, every partnership ultimately begins with an email. Over years of practice, I have distilled several principles for crafting effective cooperation proposals:

1. Lead with What the Other Party Gains, Not What You Want

This is the practical application of perspective-taking. Most failed cooperation proposals make the same mistake: spending extensive space describing how outstanding one's own institution is, without answering the question "So what's in it for me?"^[31]

A good cooperation proposal should answer in its first three sentences: "If you partner with us, you will gain X, Y, and Z."

2. Make the Complementary Value Concrete

Avoid vague "win-win" rhetoric and instead provide a specific list of resources and capabilities. For example:

• "We can arrange for your students to visit Ant Group headquarters—an opportunity not available to ordinary visitors"
• "Our entrepreneurial alumni network includes X founders of publicly listed companies who are willing to serve as mentors for your students"
• "We have three professors specializing in fintech regulation who can conduct joint research with your common law experts"

3. Start with Low Commitment

Do not propose a "dual-degree partnership" in your first message—this will overwhelm the other party. Start with low-commitment activities: an online lecture, a visit, or a summer course. This gives both parties the opportunity to "test" each other in a low-risk environment.^[32]

This is the logic of repeated games: build trust through multiple small-scale interactions, then gradually escalate the depth of cooperation.

4. Leave Room for a Graceful Decline

In culturally sensitive academic environments, "face" is an important consideration.^[33] Your proposal should allow the other party to decline gracefully—for example: "If the timing is not convenient, we would be happy to wait for a more suitable opportunity."

This is not merely a matter of courtesy but of strategy: if the other party is forced to choose between "accepting" and "declining awkwardly," they are likely to simply not respond. Leaving room for an exit actually increases the probability of receiving a positive reply.

5. One Email, One Core Message

Academic administrators receive dozens of emails each day. Your proposal must convey its core value proposition within 30 seconds. Avoid lengthy background introductions and get straight to the point.^[34]

XI. From Personal Relationships to Institutional Relationships

The greatest risk in inter-institutional cooperation is "personnel turnover"—when a key champion departs or retires, can the collaboration survive? This underscores the importance of transforming "personal relationships" into "institutional relationships."^[35]

Granovetter's theory of "embeddedness" provides a useful framework:^[36] economic behavior does not occur in a vacuum but is embedded in social networks. Inter-institutional cooperation is initially embedded in "personal networks" (the friendship between two professors), but must gradually migrate to "organizational networks" (multilayered connections across multiple departments).

Specific practices include:

1. Multilevel linkages: Ensure the collaboration involves multiple levels (professors, department chairs, deans, vice-presidents) rather than a single node
2. Documentation: Record the history of the collaboration, operational procedures, and key contacts
3. Succession planning: Proactively cultivate the "next generation" of collaboration champions
4. Institutional incentives: Incorporate international collaboration into faculty performance evaluation and promotion criteria

Before leaving Zhejiang University, I deliberately arranged for several junior faculty members to participate in the operations of the dual-degree program and compiled all processes and contact information into written documentation. This is the responsibility of a "boundary spanner"—not only building connections but ensuring they can endure.

XII. Conclusion: Trust Is the Scarcest Resource

Reflecting on these experiences, I arrive at one core insight: in inter-institutional cooperation, trust is the scarcest resource. Complementary assets can be assessed, contracts can be drafted, and resources can be allocated, but trust can only be accumulated slowly through repeated interaction.

Game theory provides a framework for understanding trust: it is not a moral virtue but an equilibrium outcome of repeated games. When both parties expect long-term interaction, when the cost of defection is high, and when the benefits of cooperation are substantial, trust will "emerge."^[37]

The practical implications are:

• Do not rush to "close the big deal"—start with small-scale collaborations
• Every interaction is an "investment" in a long-term relationship
• Honor your commitments, even small ones—reputation is cumulative
• Gradually transform personal trust into institutional trust

Ultimately, a successful strategic alliance is a carefully designed repeated game—one that transforms "1+1>2" from a mathematical possibility into an organizational reality. And it all begins with an email written from the other party's perspective.