Behavioral uncertainty and investments in cooperative relationships

Rudolf Vetschera
Additional contact information
Rudolf Vetschera: University of Vienna, Vienna, Austria, Postal: University of Vienna, Vienna, Austria

Managerial and Decision Economics, 2004, vol. 25, issue 1, 17-27

Abstract: We study a cooperative relationship between two economic agents, in which one agent can make investments in the relationship to reduce the probability that the other agent defects. The probability of defection is derived from an incomplete information decision model of the transaction partner. We show that the relationship between investment and probability of defection depends on the type of uncertainty considered and analyze the effects of parameter changes on the optimal level of investment. Copyright © 2004 John Wiley & Sons, Ltd.

Date: 2004
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1002/mde.1131 Link to full text; subscription required (text/html)

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:wly:mgtdec:v:25:y:2004:i:1:p:17-27

DOI: 10.1002/mde.1131

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().