Asset specificity means lower costs of redeployment and lower risks of opportunism associated with a contract.

Question

Quizplus · Accepted Answer

Asset specificity refers to the degree to which a particular asset is specific to a particular transaction or relationship, such that it has limited value in alternative uses or with alternative partners. This creates higher costs of redeployment or finding new partners, as well as higher risks of opportunistic behavior by the other party in the contractual relationship. Therefore, the statement in the question is incorrect.

Asset Specificity Means Lower Costs of Redeployment and Lower Risks