Research suggests that ________ are the type of alliance where existence of transaction-specific investments often leads to holdup problems.

Question

Quizplus · Accepted Answer

Joint ventures are the type of alliance where existence of transaction-specific investments often leads to holdup problems. Transaction-specific investments are investments that are made solely for the purpose of the joint venture and cannot be used for other purposes. The party making such an investment may fear that the other party may exploit their investment by demanding better terms or taking advantage of their dependence on the investment. This creates a risk of holdup, which is the threat of one party taking advantage of the other by demanding better terms or renegotiating the agreement.

Research Suggests That ________ Are the Type of Alliance Where