Collective action and market formation: An integrative framework

Brandon H. Lee, Jeroen Struben and Christopher B. Bingham

Strategic Management Journal, 2018, vol. 39, issue 1, 242-266

Abstract: Research Summary: While extant research recognizes the importance of collective action for market formation, it provides little understanding about when and to what extent collective action is important. In this article, we develop a novel theoretical framework detailing what collective action problems and solutions arise in market formation and under what conditions. Our framework centers on the development of market infrastructure with three key factors that influence the nature and extent of collective action problems: perceived returns to contributions, excludability, and contribution substitutability. We apply our framework to diverse market formation contexts and derive a set of attendant propositions. Finally, we show how collective action problems and solutions evolve during market formation efforts and discuss how our framework contributes to strategic management, entrepreneurship, and organization literatures. Managerial Summary: This article lays out the key considerations that players operating in new markets should contemplate when making nontrivial investments in those spaces. As collective action problems can thwart efforts to establish new markets, we ask: When and under what conditions should market players collaborate rather than act independently? And if players collaborate, how should they coordinate to establish a new market? To address these research questions, we develop a novel generalizable framework of collective action in market formation. Our framework assesses the presence and type of collective action problems that hinder market formation and identifies potential solutions tied to those collective action problems.

Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (28)

Downloads: (external link)
https://doi.org/10.1002/smj.2694

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:stratm:v:39:y:2018:i:1:p:242-266

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0143-2095

Access Statistics for this article

More articles in Strategic Management Journal from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().