Question

D Question 2 1 pts The incentives to cheat in a strategic alliance - hold up, moral hazard, adverse selection-are fundamentally the same as concerns we discussed in coordinating across firms. True False Question 3 1 pts The challenges of coordinating between two different firms can be an important driver of why a firm chooses to diversify. Fale Question 4 1 pts An important lesson from eBay is that off-shoring and outsourcing decisions are often linked True False

Answer 1

Answers:-

Q 2)

This statement is True. The three alliance threats: the incentives to cheat on strategic alliances  hold up , moral hazard and adverse selection.

The hold up generally happens when there is  transaction of certain investments in an exchange than partner firms invests and the firm that has not make these investments tries to exploit the firm that had made them.

The moral hazard  when the firms possess high-quality resources and capabilities that are highly valuable to the exchange between the firms but fail to make them available to other firms.

The adverse selection happens when one of the partner company promises to bring to an alliance certain resources that are useful for the partnership which it either has no control or cannot acquire.

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