We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Does ABC Information Exacerbate Hold-Up Problems in Buyer-Supplier Negotiations?
- Authors
Drake, Andrea R.; Haka, Susan F.
- Abstract
Negotiations between buyers and suppliers that require sharing cost details to identify profitable relationship specific investments often fail and result in holdups. Based on inequity aversion, strategic uncertainty, and risk dominance criteria, we expect negotiators to be more reluctant to share fine information than coarse, less detailed information, which suggests that fine information systems can exacerbate hold-ups. When negotiators share fine information they achieve more efficient bargaining agreements. However, we find that strategic concerns about inequitable outcomes (fear of opportunistic behavior) lead fewer negotiating pairs to share fine information (where inequitable outcomes can be larger) than coarse information (where inequitable outcomes are smaller). Our results demonstrate that information fineness leads negotiators to trade-off potential utility losses due to fairness considerations and potential monetary gains. Fewer (more) negotiators chose to share fine (coarse) information and thus minimize fairness based utility losses (maximize monetary gains).
- Subjects
ACTIVITY-based costing; THEORY of constraints; INDUSTRIAL procurement; SOCIAL informatics; BUSINESS enterprises
- Publication
Accounting Review, 2008, Vol 83, Issue 1, p29
- ISSN
0001-4826
- Publication type
Article
- DOI
10.2308/accr.2008.83.1.29