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Competitive advantage in alliance governance: resolving the opportunism minimization-gain maximization paradox


  • Mark H. Hansen

    (Brigham Young University, UT, USA)

  • Robert E. Hoskisson

    (Arizona State University, AZ, USA)

  • Jay B. Barney

    (The Ohio State University, OH, USA)


This paper offers a model of alliance governance that explicitly recognizes that managers of alliances simultaneously face the objectives of maximizing gains from trade while minimizing the threat of opportunism in the transaction-an apparent paradox. Our model shows that both the gains from trade and the threat of opportunism are influenced by firm characteristics (cooperative capabilities and trustworthiness) as well as transaction attributes (information asymmetry and asset specificity). The paradox may be resolved by strong form trustworthiness combined with relationship management capabilities because these characteristics allow the pursuit of gains from trade while simultaneously limiting the threat of opportunism. Copyright © 2008 John Wiley & Sons, Ltd.

Suggested Citation

  • Mark H. Hansen & Robert E. Hoskisson & Jay B. Barney, 2008. "Competitive advantage in alliance governance: resolving the opportunism minimization-gain maximization paradox," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(2-3), pages 191-208.
  • Handle: RePEc:wly:mgtdec:v:29:y:2008:i:2-3:p:191-208
    DOI: 10.1002/mde.1394

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    References listed on IDEAS

    1. Ingemar Dierickx & Karel Cool, 1989. "Asset Stock Accumulation and Sustainability of Competitive Advantage," Management Science, INFORMS, vol. 35(12), pages 1504-1511, December.
    2. Pisano, Gary P, 1989. "Using Equity Participation to Support Exchange: Evidence from the Biotechnology Industry," Journal of Law, Economics, and Organization, Oxford University Press, vol. 5(1), pages 109-126, Spring.
    3. 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.
    4. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    5. Hagedoorn, John & Schakenraad, Jos, 1992. "Leading companies and networks of strategic alliances in information technologies," Research Policy, Elsevier, vol. 21(2), pages 163-190, April.
    6. Williamson, Oliver E, 1983. "Credible Commitments: Using Hostages to Support Exchange," American Economic Review, American Economic Association, vol. 73(4), pages 519-540, September.
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    Cited by:

    1. Fawcett, Stanley E. & Jones, Stephen L. & Fawcett, Amydee M., 2012. "Supply chain trust: The catalyst for collaborative innovation," Business Horizons, Elsevier, vol. 55(2), pages 163-178.
    2. Nilsson, Magnus & Mattes, Jannika, 2013. "The spatiality of trust – Antecedents of trust and the role of face-to-face contacts," Papers in Innovation Studies 2013/16, Lund University, CIRCLE - Center for Innovation, Research and Competences in the Learning Economy.
    3. Beata Stepien & Monika Sulimowska-Formowicz, 2016. "Economic Vs. Organisational Perspective On Inter-Organisational Relations’ Analysis – Are Economists On The Dead-End Track?," Equilibrium. Quarterly Journal of Economics and Economic Policy, Institute of Economic Research, vol. 11(1), pages 159-177, March.

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