Opportunism

About: Opportunism is a research topic. Over the lifetime, 2030 publications have been published within this topic receiving 97170 citations. The topic is also known as: opportunist.

The Return of Bargain: An Economic Theory of How Standard Form Contracts Enable Cooperative Negotiation between Businesses and Consumers

Abstract: This paper analyzes standard form contracts between firms and individual consumers (and borrowers). It presents a mix of anecdotal and empirical evidence from a large number of industries demonstrating a widespread pattern in which firms refrain from enforcing the typically clear bright line performance obligations that such standard form contracts set out (such as a consumer credit repayment terms, or a retail consumer's right to return goods). Instead, firms routinely give their supervisory employees the discretion to bargain around such terms. Within a simple and informal model, the paper explains such delegated, discretionary renegotiation as a means by which firms use their managers' superior information to ex post screen for consumer type. Managers forgive breaches of contract terms by high value, honest consumers, while enforcing the tough standard form terms against low value and/or opportunistic consumers. While such practices may be vulnerable to market competition in the long run (as cut-rate firms eschew such costly renegotiation, lowering cost and price and attracting low value consumers), they may also be a stable competitive practice. Normatively, such ex post screening dominates ex ante screening by opening markets to consumers who would otherwise be denied goods or services provided on credit because they have low wealth and/or no established market reputation. Taking account of possible firm opportunism as well as consumer opportunism, the central normative implication for the law is to recommend that courts enforce promises by the firm's agents to waive or renegotiate standard form obligations, but only if there is clear proof that such promises were actually made. The paper concludes with by arguing in favor of the judicial enforcement of standard form terms regarding the settlement of disputes - such as terms requiring that disputes be resolved by arbitration. Such provisions allow consumer value, rather than ex post litigation outcomes, to be the primary determinant of firm incentives to forgive consumer breaches of performance obligations. However, because consumers remain rationally ignorant of terms regarding dispute resolution, courts have been correct to strike down terms that effectively eliminate all consumer remedies.

Intention to e‐collaborate: propagation of research propositions

Abstract: Purpose – This paper seeks to propose the examination of the importance of firms' intention to e‐collaborate in facilitating e‐collaboration for an informal alliance.Design/methodology/approach – A rigorous review of the existing literature is undertaken for the purpose of developing a contingency framework that determines firm boundaries.Findings – The conceptual framework posits that three decision contexts (the threat of opportunism, the threat of commercial failure, and the opportunity for sustainable advantage) are predictors of selecting the governance mode between e‐collaboration and arm's‐length relationship, and that an intention to e‐collaborate moderates the governance mode choice.Originality/value – Testable propositions are offered to examine the proposed relationships in the framework. The paper concludes by suggesting that firms which would like to implement e‐collaboration in a group of companies must initiate and strengthen their intention to form the desired governance mode.

Institutional Economics at the Micro Level? What Transaction Costs Theory Could Learn from Original Institutionalism (In the Spirit of Building Bridges)

Abstract: Inertia in academia sometimes obstructs the development of important insights. That is one reason for the specially long gap separating Coase's seminal paper [1937] that laid the foundations of current Transaction Cost Economics (TCE) and the efforts of scholars to develop his ideas. But as TCE evolved and merged with the name of Oliver Williamson, it has absorbed a tension 'between an intuitive commitment to realism...and his commitment to some core presumptions of mainstream economics' [Hodgson 1998]. Most TCE scholars seem to rely on the latter commitment, and this could mean losing a chance of enriching economics in its methodological and theoretical foundations. This paper regroups and comments criticisms from 'Original' Institutional Economics (OIE) to TCE in the spirit of building bridges on: i) discrepancies among TCE’s and Commons’ concepts of transaction; ii) TCE’s use of efficiency as a status quo rationalization; iii) the static analysis that ignores institutional feed-backs; iv) the assumption of opportunism; and v) the incompatibility of bounded rationality and optimizing behavior.

Cloud computing and business-to-business networks

Abstract: The objective of this study is to clarify the concept of cloud computing and analyse how it can influence the business-to-business (B2B) world. The study reviews the cloud concept and its definitions published throughout the IT literature. The article then analyses how cloud computing can be applied in B2B networks, from the point of view of transaction cost economics and social network theory. The analysis focuses on how operating in a cloud can influence the transaction costs businesses face in the marketplace and how it can affect the make or buy decision. The study concludes that the overall benefits of cloud computing, including low cost and low investment, real-time accessibility, standardisation and flexibility, lead to lower transaction costs, asset specificity and opportunism. Cloud integration allows companies to better communicate and coordinate with their partners, leading to higher and more efficient levels of market integration.