The Contingent Effect of Alliance Design on Alliance Dynamics and Performance: An Experimental Study

47 Pages Posted: 19 Dec 2017

See all articles by Albert Banal-Estanol

Albert Banal-Estanol

City University

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Debrah Meloso

Toulouse Business School

Jo Seldeslachts

KU Leuven - Faculty of Business and Economics (FEB); German Institute for Economic Research (DIW Berlin)

Date Written: December 2017

Abstract

A core question in alliance research is how alliance design influences alliance success. Two underexplored aspects of this question are whether the effect of alliance design is contingent on the external competitive environment and how alliance design affects the behavioral dynamics in an alliance. We address these aspects by studying two core dimensions of alliance design, the level of commitment in an alliance and the number of alliance partners. We match two competitive environments, high and low competition, with different alliance designs and vary the number of alliance partners and the level of commitment and experimentally study the aggregate performance and behavioral dynamics of the different alliance designs. We find that with low competition, alliance design does not affect performance much, while with high competition, alliance performance depends heavily on alliance design. Regarding dynamics, we find that aggregate performance is most strongly affected by first-period behavior, while the willingness to forgive a partner's non-cooperative behavior has a more muted effect on alliance performance.

Keywords: laboratory experiment, Organization Design, Strategic Alliances

Suggested Citation

Banal-Estanol, Albert and Kretschmer, Tobias and Meloso, Debrah C and Seldeslachts, Jo, The Contingent Effect of Alliance Design on Alliance Dynamics and Performance: An Experimental Study (December 2017). CEPR Discussion Paper No. DP12512, Available at SSRN: https://ssrn.com/abstract=3089769

Albert Banal-Estanol (Contact Author)

City University

Khagan
Bangladesh

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Debrah C Meloso

Toulouse Business School ( email )

20, bd Lascrosses
Toulouse, 31068
France

Jo Seldeslachts

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstra├če 58
Berlin, 10117
Germany

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