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Brokers and Competitive Advantage

Author

Listed:
  • Michael D. Ryall

    () (Melbourne Business School, University of Melbourne, 200 Leicester Street, Carlton, VIC 5053, Australia)

  • Olav Sorenson

    () (Rotman School of Management, University of Toronto, 105 St. George Street, Toronto, Ontario, Canada M5S 3E6 and London Business School, Regent's Park, London NW1 4SA, United Kingdom)

Abstract

The broker profits by intermediating between two (or more) parties. Using a biform game, we examine whether such a position can confer a competitive advantage, as well as whether any such advantage could persist if actors formed relations strategically. Our analysis reveals that, if one considers exogenous the relations between actors, brokers can enjoy an advantage but only if (1) they do not face substitutes either for the connections they offer or the value they can create, (2) they intermediate more than two parties, and (3) interdependence does not lock them into a particular pattern of exchange. If, on the other hand, one allows actors to form relations on the basis of their expectations of the future value of those relations, then profitable positions of intermediation only arise under strict assumptions of unilateral action. We discuss the implications of our analysis for firm strategy and empirical research.

Suggested Citation

  • Michael D. Ryall & Olav Sorenson, 2007. "Brokers and Competitive Advantage," Management Science, INFORMS, vol. 53(4), pages 566-583, April.
  • Handle: RePEc:inm:ormnsc:v:53:y:2007:i:4:p:566-583
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    File URL: http://dx.doi.org/10.1287/mnsc.1060.0675
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    References listed on IDEAS

    as
    1. Glenn MacDonald & Michael D. Ryall, 2004. "How Do Value Creation and Competition Determine Whether a Firm Appropriates Value?," Management Science, INFORMS, vol. 50(10), pages 1319-1333, October.
    2. Adam Brandenburger & Harborne Stuart, 2007. "Biform Games," Management Science, INFORMS, vol. 53(4), pages 537-549, April.
    3. David H. Hsu, 2004. "What Do Entrepreneurs Pay for Venture Capital Affiliation?," Journal of Finance, American Finance Association, vol. 59(4), pages 1805-1844, August.
    4. Olivier Chatain & Peter Zemsky, 2007. "The Horizontal Scope of the Firm: Organizational Tradeoffs vs. Buyer-Supplier Relationships," Management Science, INFORMS, vol. 53(4), pages 550-565, April.
    5. James Moody & Douglas R. White, 2000. "Structural Cohesion and Embeddedness: A Hierarchical Conception of Social Groups," Working Papers 00-08-049, Santa Fe Institute.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Anjos, Fernando, 2016. "Resource configuration, inter-firm networks, and organizational performance," Mathematical Social Sciences, Elsevier, vol. 82(C), pages 37-48.
    2. repec:bla:stratm:v:38:y:2017:i:2:p:342-362 is not listed on IDEAS
    3. repec:bla:stratm:v:38:y:2017:i:1:p:17-41 is not listed on IDEAS
    4. repec:bla:stratm:v:38:y:2017:i:10:p:1964-1985 is not listed on IDEAS
    5. Lissoni, Francesco, 2010. "Academic inventors as brokers," Research Policy, Elsevier, vol. 39(7), pages 843-857, September.
    6. Steigenberger, Norbert, 2014. "Only a matter of chance? How firm performance measurement impacts study results," European Management Journal, Elsevier, vol. 32(1), pages 46-65.
    7. José-Antonio Belso-Martínez & Manuel Expósito-Langa, 2015. "Persistence and extinction of brokerage roles in clusters: the role of status, former experiences and extra-cluster relationships," Papers in Evolutionary Economic Geography (PEEG) 1501, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jan 2015.
    8. Günter Fandel & Jan Trockel, 2016. "Investment and lot size planning in a supply chain: coordinating a just-in-time-delivery with a Harris- or a Wagner/Whitin-solution," Journal of Business Economics, Springer, vol. 86(1), pages 173-195, January.

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