Perspective taking (PT) is central to understanding human interactions. PT entails both cognitive mechanisms and social interactions but it is not quite clear how the social and the cognitive approaches to PT relate to each other. Several psychologists have argued that PT has cognitive underpinnings and others have argued that PT is multidimensional and also requires social interactions. In this paper, we experimentally contrast these two approaches to PT and show how it affects interaction outcomes in a specific decision making context – co-founder equity split decisions.

We identified co-founder decision making about how to split equity in the very early stages of venture creation as an ideal context in which to study the differential effects of the cognitive and social approaches to PT. This context has the characteristics of a cooperative decision: co-founders start from a position of wanting to come together rather than through conflict or disagreement over extant issues. At the same time, their capabilities and their roles in the venture are different since each of them brings different yet complementary expertise and resources into the venture.