Information gathering through alliances

Wilko Letterie*, John Hagedoorn, Hans van Kranenburg, Franz Palm

*Corresponding author for this work

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Abstract

The effect of a firm's uncertainty regarding technological development on the formation of alliances is examined, and it is shown that this uncertainty is positively related to the number of alliances. However, higher uncertainty also makes the firm less likely to ally with others if the collected information is redundant. The higher the similarity between the technological regimes of potential alliance partners, the lower the incentive to ally. Also direct ties are preferred to indirect ones if uncertainty is high since direct ties yield more accurate information than indirect ties.
Original languageEnglish
Pages (from-to)176-194
JournalJournal of Economic Behavior & Organization
Volume66
Issue number2
DOIs
Publication statusPublished - May 2008

Keywords

  • technology alliances
  • Bayesian learning
  • redundant information
  • direct and indirect ties
  • social and economic networks

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