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|Title:||Asset specificity and the fear of exploitation|
Fear of exploitation
|Source:||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|
|Appears in Collections:||Staff Publications|
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