Incentives, opportunism and behavioral uncertainty in electricity industries
Many theories on the economics of the firm assume that economic actors are opportunistic. The focus of these theories is on the mitigation of the uncertainty that economic actors may behave opportunistically, and on the ability of contracts and governance structures to reduce this behavioral uncertainty. Previous studies did not analyze the properties of behavioral uncertainty in detail, nor did they emphasize the empirical verification of behavioral uncertainty with revealed opportunistic behavior. This article addresses both of these lacunae in the literature by focusing on incentive alignment between parties to information transactions and on empirical proof of opportunistic behavior. When a context aligns incentives, contracting parties do not behave opportunistically. When a context does not align incentives, contracting parties strategically distort or disguise information. A study of 239 regulatory decisions on dispute resolutions and enforcements of energy laws in the Dutch and French electricity industries confirms these propositions.
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.:
- Keld Laursen & Volker Mahnke, .
"Knowledge strategies, firm types, and complementarity in human-resource practices,"
IVS/CBS Working Papers
00-8, Department of Industrial Economics and Strategy, Copenhagen Business School.
- Keld Laursen & Volker Mahnke, 2001. "Knowledge Strategies, Firm Types, and Complementarity in Human-Resource Practices," Journal of Management and Governance, Springer, vol. 5(1), pages 1-27, March.
- John, George & Weitz, Barton A, 1988. "Forward Integration into Distribution: An Empirical Test of Transaction Cost Analysis," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 337-55, Fall.
- Anderson, Erin, 1988. "Transaction costs as determinants of opportunism in integrated and independent sales forces," Journal of Economic Behavior & Organization, Elsevier, vol. 9(3), pages 247-264, April.
- Claycomb, Cindy & Frankwick, Gary L., 2005. "The dynamics of buyers' perceived costs during a relationship development process: an empirical assessment," Journal of Business Research, Elsevier, vol. 58(12), pages 1662-1671, December.
- Liu, Yi & Li, Yuan & Zhang, Leinan, 2010. "Control mechanisms across a buyer-supplier relationship quality matrix," Journal of Business Research, Elsevier, vol. 63(1), pages 3-12, January.
- Gassenheimer, Jule B. & Baucus, David B. & Baucus, Melissa S., 1996. "Cooperative arrangements among entrepreneurs: An analysis of opportunism and communication in franchise structures," Journal of Business Research, Elsevier, vol. 36(1), pages 67-79, May.
- George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, Oxford University Press, vol. 84(3), pages 488-500.
- Lui, Steven S. & Wong, Yin-yee & Liu, Weiping, 2009. "Asset specificity roles in interfirm cooperation: Reducing opportunistic behavior or increasing cooperative behavior?," Journal of Business Research, Elsevier, vol. 62(11), pages 1214-1219, November.
- Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
- Deligonul, Seyda & Kim, Daekwan & Roath, Anthony S. & Cavusgil, Erin, 2006. "The Achilles' heel of an enduring relationship: Appropriation of rents between a manufacturer and its foreign distributor," Journal of Business Research, Elsevier, vol. 59(7), pages 802-810, July.
- Macher Jeffrey T & Richman Barak D, 2008. "Transaction Cost Economics: An Assessment of Empirical Research in the Social Sciences," Business and Politics, De Gruyter, vol. 10(1), pages 1-65, May.
- Bianchi, Constanza C. & Saleh, Md. Abu, 2011. "Antecedents of importer relationship performance in Latin America," Journal of Business Research, Elsevier, vol. 64(3), pages 258-265, March.
- De Vita, Glauco & Tekaya, Arafet & Wang, Catherine L., 2010. "Asset specificity's impact on outsourcing relationship performance: A disaggregated analysis by buyer-supplier asset specificity dimensions," Journal of Business Research, Elsevier, vol. 63(7), pages 657-666, July.
- Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-40, September.
- Buvik, Arnt & Reve, Torger, 2001. "Asymmetrical deployment of specific assets and contractual safeguarding in industrial purchasing relationships," Journal of Business Research, Elsevier, vol. 51(2), pages 101-113, February.
- Sollner, Albrecht, 1999. "Asymmetrical Commitment in Business Relationships," Journal of Business Research, Elsevier, vol. 46(3), pages 219-233, November.
- Mohammed Rawwas & Ziad Swaidan & Jamal Al-Khatib, 2006. "Does Religion Matter? A Comparison Study of the Ethical Beliefs of Marketing Students of Religious and Secular Universities in Japan," Journal of Business Ethics, Springer, vol. 65(1), pages 69-86, 04.
- Erin Anderson, 1985. "The Salesperson as Outside Agent or Employee: A Transaction Cost Analysis," Marketing Science, INFORMS, vol. 4(3), pages 234-254.
- Oliver E. Williamson, 2000. "The New Institutional Economics: Taking Stock, Looking Ahead," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 595-613, September.
When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:65:y:2012:i:7:p:1031-1039. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shamier, Wendy)
If references are entirely missing, you can add them using this form.