On Some Procedures of Forming a Multipartner Alliance
"In the article, we study two different ways of forming multipartner alliances between firms with the central idea that procedure is an important factor in multipartner alliance formation. In the first procedure, an alliance is formed simultaneously, while in the second procedure (step-by-step) members are added one by one. In the model we present, each firm is assumed to have a multidimensional maneuvering space, which consists of all alliance positions acceptable to the firm, and an ideal position in this space. Alliances will form between the firms whose maneuvering spaces overlap. The results of the analysis confirm that procedure is an important factor in multipartner alliance formation. Nevertheless, if ideal positions of firms are acceptable to all alliance partners, then the result of alliance formation does not depend on procedure. In addition, it is shown that it can be disadvantageous to be a first mover. Finally, we are able to provide sufficient conditions under which one procedure is preferred in a three-partner case. More specifically, a firm with its ideal position acceptable to the two other firms may prefer the simultaneous procedure to being a late mover if (1) there is a certain balance in the firms' degree of flexibility and their power and (2) if the agreed alliance position of the two other firms is acceptable to the firm in question." Copyright (c) 2008, The Author(s) Journal Compilation (c) 2008 Blackwell Publishing.
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Volume (Year): 17 (2008)
Issue (Month): 2 (06)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bloch, Francis, 1996. "Sequential Formation of Coalitions in Games with Externalities and Fixed Payoff Division," Games and Economic Behavior, Elsevier, vol. 14(1), pages 90-123, May.
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- Arvind Parkhe, 1991. "Interfirm Diversity, Organizational Learning, and Longevity in Global Strategic Alliances," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 22(4), pages 579-601, December.
- Asha Rao & Stuart M Schmidt, 1998. "A Behavioral Perspective on Negotiating International Alliance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 29(4), pages 665-694, December.
- Daniel J. Seidmann & Eyal Winter, 1998. "A Theory of Gradual Coalition Formation," Review of Economic Studies, Oxford University Press, vol. 65(4), pages 793-815.
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