Firm Heterogeneity and Competitive Dynamics in Alliance Formation

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SSCI Scopus

Abstract

We　present　a　theoretical　model　that　attempts　to　generalize　the　conditions　for　alliance　formation.　This　model　is　based　on　internal　and　external　conditions　of　alliance　formation:　resource　heterogeneity　and　competitive　dynamics.　We　also　introduce　a　game-theoretic　model　of　alliance　formation　according　to　the　net　gains　from　an　alliance　and　the　prevention　of　losses　that　could　occur　from　competitors＇　alliance　activities.　The　model　provides　a　theoretical　insight　on　a　paradoxical　setting　that　some　firms　join　an　alliance　despite　little　gains　while　others　avoid　or　delay　it　despite　potentially　strong　gains　from　the　alliance.

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