Abstract

"Decision Making in Strategic Alliances: An Experimental Investigation"

Rajshree Agarwal, Rachel Croson, and Joseph T. Mahoney

First Author :

Rajshree Agarwal
Business Administration
University of Illinois at Urbana-Champaign, College of Business
1206 S. Sixth Street
350A Wohlers Hall, MC 706
Champaign, IL 61820
USA

217-265-5513

agarwalr@uiuc.edu

http://www.business.uiuc.edu/faculty/agarwal.html

Second Author :

Rachel Croson
Wharton School of Business, University of Pennsylvania
500 Jon M. Huntsman Hall
Philadelphia, PA 19104
USA

215-898-3025

crosonr@wharton.upenn.edu

Third Author :

Joseph T. Mahoney
Business Administration
University of Illinois at Urbana-Champaign, College of Business
1206 S. Sixth Street
140C Wohlers Hall, MC 706
Champaign, IL 61820
USA

217-244-8257

josephm@uiuc.edu

http://www.business.uiuc.edu/faculty/mahoney.html

Abstract :

This paper experimentally investigates the determinants of the deviation between potential and realized value creation in strategic alliances. To better understand how decision making in alliances may influence success, we use an experimental design that juxtaposes two important factors that affect alliance members’ decisions: economic incentives and communication. The evidence derived from our experimental design sheds light on the relative impact of each, and importantly, how both factors interact to explain the probability of successful outcomes in an alliance. These empirical results are robust to the use of undergraduates, MBAs and seasoned executives who averaged over 20 years of work experience.

Footnotes & Acknowledgements :

We thank the University of Illinois at Urbana-Champaign (UIUC) Research Board for their financial support. Shravan Gaonkar provided able technical assistance for the creation of the experiment programming code. We appreciate the support provided by Steven Sonka and the staff at the National Soybean Research Laboratory at the University of Illinois, Urbana-Champaign. The manuscript has benefited from comments received at the 2003 Academy of Management Meetings.

Manuscript Received : 2007

Manuscript Published : 2007

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