Cooperation, opportunism, and the invisible hand: implications for transaction cost theory

Article Abstract:

Transaction cost theorists have generally neglected to consider the implications that the invisible hand of the market mechanism can have for the risk of opportunism. In the long run, the invisible hand deletes actors whose behaviors are habitually opportunistic. Consequently, as markets move toward the state of competitive equilibrium, the risk of opportunism will be low, even for transactions supported by specific asset investments. Therefore, in many contexts the transaction cost rationale for internalization has been overstated. (Reprinted by permission of the publisher.)

Transactional analysis

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Differentiation versus low cost or differentiation and low cost: a contingency framework

Article Abstract:

In the policy literature there is an assumption that the generic business-level strategies of differentiation and overall cost leadership are generally inconsistent. Contrary to this view, this article presents a contingency framework in which differentiation can be a means for firms to establish an overall low-cost position and discusses that a combination of differentiation and low cost may be necessary for firms to establish a sustainable competitive advantage. (Reprinted by permission of the publisher.)

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Toward a system for classifying business strategies

Article Abstract:

Porter's (1980) and Abell's (1980) attempts to classify business strategies have several fundamental limitations. After discussing the objectives and attributes of "scientific" classification systems, this article presents a new classification scheme, built on the work of Porter and Abell, as a first step toward developing an "optimal" business strategy classification system. (Reprinted by permission of the publisher.)

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