________ occurs when partners in an alliance possess high-quality resources and capabilities of significant value in an alliance but fail to make those resources and capabilities available to alliance partners.

Question

Quizplus · Accepted Answer

Moral hazard refers to the risk that one party in an alliance will behave in a way that is not in the best interest of the other party, due to a lack of accountability or incentive alignment. In this case, one partner has valuable resources and capabilities but does not make them available to the other partner, potentially reducing the value and effectiveness of the alliance. This is an example of moral hazard. Adverse selection refers to the risk of selecting the wrong partner for an alliance, holdup refers to a situation where one party uses their bargaining power to extract more value from the other party, and explicit collusion refers to illegal coordination between competitors.

________ Occurs When Partners in an Alliance Possess High-Quality Resources