Working Paper: CEPR ID: DP12512
Authors: Albert Banalestanol; Tobias Kretschmer; Debrah Meloso; Jo Seldeslachts
Abstract: A core question in alliance research is how alliance design influencesalliance success. Two underexplored aspects of this question are whetherthe effect of alliance design is contingent on the external competitiveenvironment and how alliance design affects the behavioral dynamics in analliance. We address these aspects by studying two core dimensions ofalliance design, the level of commitment in an alliance and the number ofalliance partners. We match two competitive environments, high and lowcompetition, with different alliance designs and vary the number of alliancepartners and the level of commitment and experimentally study theaggregate performance and behavioral dynamics of the different alliancedesigns. We find that with low competition, alliance design does not affectperformance much, while with high competition, alliance performancedepends heavily on alliance design. Regarding dynamics, we find thataggregate performance is most strongly affected by first-period behavior,while the willingness to forgive a partner's non-cooperative behavior has amore muted effect on alliance performance.
Keywords: organization design; laboratory experiment; strategic alliances
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| alliance design (D74) | alliance performance (D74) |
| high-competition environments (L19) | alliance performance (D74) |
| low-competition environments (L19) | alliance performance (D74) |
| first-period behavior (C92) | alliance performance (D74) |
| willingness to forgive noncooperative behavior (C71) | alliance performance (D74) |