When One Firm Makes More Transaction-Specific Investments in a Strategic

question 26

Multiple Choice

When one firm makes more transaction-specific investments in a strategic alliance than partner firms make, that firm may be subject to a form of cheating called ________ that occurs when a firm that has not made significant transaction-specific investments demands returns from an alliance that are higher than what the partners agreed to when they created the alliance.

• A) adverse selection
• B) holdup
• C) moral hazard
• D) noncompliance

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Definitions:

Gender Differences

Variations in characteristics, behaviors, or attitudes between males and females due to biological, social, and cultural factors.

Hospitalization

The process of admitting someone into a hospital for medical treatment or observation.

Collective Action

Occurs when people act in unison to bring about or resist social, political, and economic change.

Sporadic

Occurring at irregular intervals or only in a few places; scattered or isolated.