Collective Action and Market Formation: An Integrative Framework

Strategic Management Journal, Forthcoming

45 Pages Posted: 1 Aug 2018 Last revised: 27 Mar 2020

See all articles by Brandon H. Lee

Brandon H. Lee

Melbourne Business School

Jeroen Struben

emlyon business school; Massachusetts Institute of Technology (MIT) - Sloan School of Management

Christopher Bingham

University of North Carolina (UNC) at Chapel Hill

Date Written: August 23, 2017

Abstract

While extant research recognizes the importance of collective action for market formation, it provides little understanding about when and to what extent collective action is important. In this paper, we develop a novel theoretical framework detailing what collective action problems and solutions arise in market formation and under what conditions. Our framework centers on the development of market infrastructure with three key factors that influence the nature and extent of collective action problems: perceived returns to contributions, excludability, and contribution substitutability. We apply our framework to diverse market formation contexts and derive a set of attendant propositions. Finally, we show how collective action problems and solutions evolve during market formation efforts and discuss how our framework contributes to strategic management, entrepreneurship, and organization literatures.

Keywords: Market Formation, Collective Action, Collective Action Problems, Coordination, Uncertainty

Suggested Citation

Lee, Brandon H. and Struben, Jeroen and Bingham, Christopher, Collective Action and Market Formation: An Integrative Framework (August 23, 2017). Strategic Management Journal, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3212695

Brandon H. Lee (Contact Author)

Melbourne Business School ( email )

200 Leicester Street
Carlton, Victoria 3053 3186
Australia

Jeroen Struben

emlyon business school ( email )

23 Avenue Guy de Collongue
Ecully, 69132
France

HOME PAGE: http://https://www.marketformationdynamics.org/jeroen-struben

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

Cambridge, MA 02142
United States

HOME PAGE: http://web.mit.edu/jjrs/www/

Christopher Bingham

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

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