Rent Appropriation in Strategic Alliances: A Study of Technical Alliances in Pharmaceutical Industry

Many existing alliance studies have investigated how embedded relations create superior value for organizations. The role of network structure in rent appropriation or pie splitting, however, has been underexplored. We propose that favorable locations in interorganizational networks provide firms with superior opportunities for appropriating more economic benefits from alliances than their partners do. Specifically, we argue that partners’ asymmetric network positions will lead to unequal brokerage positions that promote disparate levels of information gathering, monitoring, and bargaining power, which lead to differing capacities to appropriate value. This in turn results in variations in market performance. We also propose this brokerage position exacerbates existing inequalities such as commercial capital; thus, available firm resources will moderate such network effects. Evidence is presented in the form of market response to technology alliance announcements from a set of pharmaceutical firms. In general, we find that firms within central network positions and those spanning structural holes have higher returns than their partners. In addition, we show that this relationship is contingent upon available firm resources

Joint Head Selection and Airtime Allocation for Data Dissemination in Mobile Social Networks

Mobile social networks (MSNs) enable people with similar interests to interact without Internet access. By forming a temporary group, users can disseminate their data to other interested users in proximity with short-range communication technologies. However, due to user mobility, airtime available for users in the same group to disseminate data is limited. In addition, for practical consideration, a star network topology among users in the group is expected. For the former, unfair airtime allocation among the users will undermine their willingness to participate in MSNs. For the latter, a group head is required to connect other users. These two problems have to be properly addressed to enable real implementation and adoption of MSNs. To this aim, we propose a Nash bargaining-based joint head selection and airtime allocation scheme for data dissemination within the group. Specifically, the bargaining game of joint head selection and airtime allocation is first formulated. Then, Nash bargaining solution (NBS) based optimization problems are proposed for a homogeneous case and a more general heterogeneous case. For both cases, the existence of solution to the optimization problem is proved, which guarantees Pareto optimality and proportional fairness. Next, an algorithm, allowing distributed implementation, for join head selection and airtime allocation is introduced. Finally, numerical results are presented to evaluate the performance, validate intuitions and derive insights of the proposed scheme

Investment Options and Bargaining Power the Eurasian Supply Chain for Natural Gas

We use cooperative game theory to analyze how the architecture of the pipeline network determines the power structure in the supply chain for Russian gas. If the assessment is narrowly focused on the abilities to obstruct flows in the existing system, the main transit countries, Belarus and Ukraine, appear to be strong. If investment options are accounted for, however, Russia achieves clear dominance. We show that options to bypass one of the transit countries are of little strategic importance compared to Russia's direct access to its customers through the Baltic Sea. Comparing the results of our calibrated model with empirical evidence obtained from transit and import agreements we find that the Shapley value explains the power of major transit countries better than the core and the nucleolus.Bargaining Power, Supply Chain, Shapley Value, Gas Transport

A Fixed Effects Analysis of the Adoption of New Technologies in the Cuban Sugar Industry, 1899-1929

This paper focuses on the relationship between technical and institutional changes in Cuba a leader in the use of continuousprocess technologies being applied to cane sugar manufacture in the first three decades of the twentieth century. Using a fixed effects model of the sugar manufacturer's decision to invest in new technologies, we show that a change in institutional factors had an impact on the adoption of the new technologies. The results show that differences in cane contracting arrangements affected the ease with which mills adopted new technologies. These differences were based on historical factors in the evolution of the cane farming institution in Cuba that affected whether the cane lands were the property of the farmer or the mill. This distinction created differences in the cane farmers' bargaining positions in the renegotiation of contracts with the mill, and it resulted in variation in the long-run costs of procuring cane at different mills

Varieties of System Transformations and Their Structural Background Based on the IPS Model

This study is the theoretical chapter of a planned book. This book, aims to contribute to the theoretical foundations of similarities and differences in the transformation of party-state systems. Analytical framework of system transformation is based on the extension of the Interactive Party State model (Csan di, 2006) where specifics of the structure and operation of party-state systems and structural background of their disparities were described and analyzed. Self-similarities and disparities of transformation and path-dependency of the variety of systemic outcomes are assigned to structural characteristics of power distribution of party-state systems interpreted as networks. The empirical part of the book uses the Chinese case to test this theory, measuring the dynamics of system transformation, the consequences of short- and long-term external adaptation pressures on the system transformation and long-term consequences of the short-term reactions to these pressures and their spatial disparities. This research was supported by the National Research Foundation in Hungary.system transformation, economic transformation political transformation, sequence of transformation, disparities of transformation, varieties of system outcomes, party-state network

Merchant Transmission Investment

We examine the performance attributes of a merchant transmission investment framework that relies on �market driven� transmission investment to provide the infrastructure to support competitive wholesale markets for electricity. Under a stringent set of assumptions, the merchant investment model appears to solve the natural monopoly problem and the associated need for regulating transmission companies traditionally associated with electric transmission networks. We expand the model to incorporate imperfection in wholesale electricity markets, lumpiness in transmission investment opportunities, stochastic attributes of transmission networks and associated property rights definition issues, the effects of the behaviour system operators and transmission owners on transmission capacity and reliability, co-ordination and bargaining considerations, forward contract, commitment and asset specificity issues. This significantly undermines the attractive properties of the merchant investment model. Relying primarily on a market driven investment framework to govern investment is likely to lead to inefficient investment decisions and undermine the performance of competitive markets

Regulatory reforms of European network industries and the courts

Regulatory reforms in European network industries are strongly influenced by legal decisions. The cases considered in this paper not only initiated the liberali-zation process of the markets for network services but also provided an impor-tant signaling function for the remaining regulatory problems: localization of network-specific market power, abolishment of grandfathering rights, ex ante regulation of network-specific market power instead of negotiated unregulated network access, incentive regulation instead of cost-based regulation. The process towards sector-symmetric market power regulation based on economi-cally founded principles gains increasing relevance. Nevertheless, there are fur-ther reform potentials to be exhausted in the future. --

The embeddedness of global production networks: The impact of crisis on Fiji's garment export sector

In this paper the author explores how changing geopolitical conditions reconfigure network embeddedness and theorises the conditions of network disconnection and transformation. Through a case study of the changes in interfirm relationships within the Fiji – Australia garment-production network after Fiji’s 2000 political coup d’état, the author develops a relational and dynamic view of embeddedness, highlighting its multifaceted and multiscalar character and emphasising the interrelationships between embeddedness, trust, and power