Please use this identifier to cite or link to this item: https://doi.org/10.1016/j.jebo.2004.04.007
Title: Asset specificity and the fear of exploitation
Authors: Hwang, P. 
Keywords: Asset specificity
Fear of exploitation
Time horizon
Trust
Issue Date: 2006
Citation: Hwang, P. (2006). Asset specificity and the fear of exploitation. Journal of Economic Behavior and Organization 60 (3) : 423-438. ScholarBank@NUS Repository. https://doi.org/10.1016/j.jebo.2004.04.007
Abstract: If asset specificity renders the investing party dependent ex post, why would the ex ante willingness to make relationship-specific investments vary? We show how specific investments generate both positive and counter-negative cooperative incentives. We also observe the influences of trust and time horizon on these incentives, which are aggregated to derive the specific investments effect (SIE). Our result suggests that while the fear of exploitation increases proportionally to the magnitude of specific investments and the attendant quasi-rents, it grows exponentially with the deterioration of inter-personal (trust) and/or inter-temporal (time horizon) contexts. © 2005 Elsevier B.V. All rights reserved.
Source Title: Journal of Economic Behavior and Organization
URI: http://scholarbank.nus.edu.sg/handle/10635/44307
ISSN: 01672681
DOI: 10.1016/j.jebo.2004.04.007
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