Firms often cooperate and compete simultaneously with their alliance partners. This thesis attempts to explore the mechanisms that firms can use to promote cooperation and limit competition in competitor alliances. Specifically, I investigate how firms can minimize competition through alliance designs such as alliance scope and alliance governance, while maximizing cooperation through resource complementarity, repeated alliance experience and external technological uncertainty. I also examine firms’ relative bargaining power in their value appropriation from competitor alliances. The data were collected from four industries (computer, pharmaceutical, steel, and food) in the United States from 1980 to 2006, and an event study methodology was used. The findings suggest that, in order to benefit from competitor alliances, firms need to form equity governance mode, find partners with resource complementarity, form competitor alliances with repeated partners, and conduct competitor alliances under a high degree of technological uncertainty. It is also interesting to find that small firms, compared with large firms, are likely to reap more market returns from competitor alliances.