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:

Macro Tools Design Tab

A feature in some software applications that provides users with tools to create, manage, and edit macros, which are sets of automated commands.

If Statement

A conditional programming construct used to perform different actions based on whether a specified condition is true or false.

Else If

A conditional statement in programming that specifies a new condition to test if the previous condition(s) is false.

Else

In programming, a conditional statement that executes a block of code if the preceding 'if' condition is not true.