It has been demonstrated that base station cooperation can reduce co-channel interference (CCI) and increase cellular system capacity. In this work, we consider another approach by dividing the system into picocells through denser base station deployment. For a two-dimensional hexagon cellular array and the propagation model under consideration, we observe that the operating regime shifts from interference-limited to noise-limited when the density increases to about 20 base stations per km2. To compare the performance of both approaches, we adopt a criterion to maximize the minimum served spectral efficiency with a certain user outage constraint. Simulations show that denser base station deployment outperforms suboptimal cooperation schemes (zero-forcing) when the density increases beyond 3∼12 base stations per km2, the exact value depending on the rules of outage user selection. However, close-to-optimal cooperation schemes (zero-forcing with dirty-paper-coding) are always superior to denser base station deployment.