quiz chapter 9

If, prior to entering the cooperative agreement with eBay, eBay's Korean partner stated that it had the technological capabilities to facilitate eBay's Korean auction business when, in fact, the Korean company did not have these capabilities, this would be an example of

adverse selection

________ exist(s) when firms directly communicate with each other to coordinate their levels of production and/or their prices.

explicit collusion

Two possible substitutes for strategic alliances include

going it alone and acquisitions.

Network industries are characterized by

increasing return of scale

When the probability of cheating in a cooperative relationship is greatest, a(n) ________ is the preferred form of cooperation.

joint venture

In general, the ________ tangible the resources and capabilities that are to be brought to a strategy alliance, the ________ costly it will be to estimate their value before an alliance is created, and the ________ likely it is that adverse selection will occur.

less' more ; more

A ________ is a form of nonequity alliance that exists when one firm allows another to use its brand name to sell its products.

listening agreement

An example of a contractual clause that deals with operating issues would be a

noncompete clause

Research indicates that the most common reason that alliances fail to meet the expectations of partner firms is

partners inability to trust from one another

________ theory suggests that under conditions of high uncertainty, firms may be unwilling to commit to a particular course of action by engaging in an exchange with a firm and will choose, instead, the strategic flexibility associated with alliances.

rea l option

To the extent that a strategic alliance is based on ________ relations, it will make the alliances costly to imitate.

socially complex

Alliances will be preferred to acquisitions when

there are legal constraints on acquisitions.

Strategic alliances are particularly valuable in facilitating market entry and exit when the value of market entry or exit is

uncertain

A firm's ability to learn is known as its

absorption capacity