Review of Economic Studies Vol. 66 No. 4 1999
Informational Alliances
Abstract
An informational alliance involves the consolidation of the private information of independent suppliers in anticipation of a contracting opportunity with a principal. An informational alliance is an intermediate form of organization between the consolidation of information as in a merger and the suppliers remaining separate entities. It can Pareto dominate a merger, independent contracting, and hierarchical contracting, so a principal can benefit by allowing suppliers to organize the supply network. An informational alliance forms at the nexus of internally-verifiable private information. The principal's contracting problem then involves a participation condition with a reservation value that is a function of type.
- DOI
- 10.1111/1467-937x.00107
- Volume
- 66
- Issue
- 4
- Pages
- 743-768
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref