Mitigating Procurement Hazards in the Context of Innovation

John M. de Figueiredo and David Teece
Additional contact information
John M. de Figueiredo: Haas School of Business, University of California, Berkeley, CA 94720-1930, U.S.A.

Chapter 5 in Essays in Technology Management and Policy:Selected Papers of David J Teece, 2003, pp 121-145 from World Scientific Publishing Co. Pte. Ltd.

Abstract: AbstractThis paper extends the transaction cost economics framework to examine the contractual hazards that arise in the course of technological innovation. We identify three main strategic hazards related to future technological opportunities that may develop in business transactions: loss of technological pacing possibilities on the technological frontier, loss of technological control at or behind the frontier, and design omissions. In examining these hazards we focus on the increasingly common phenomenon of vertically integrated firms supplying downstream competitors. We then analyze how constellations of safeguards, particularly relational safeguards, can augment transaction-specific safeguards in many instances to ensure high-powered incentives are maintained. We also consider under what conditions downstream divestiture is a desirable economizing option. Supportive illustrations are drawn from the desktop laser printer and telecommunications industries.

Date: 2003
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789812796929_0005 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789812796929_0005 (text/html)
Ebook Access is available upon purchase.

Related works:
Chapter: Mitigating Procurement Hazards in the Context of Innovation (2008)
Journal Article: Mitigating Procurement Hazards in the Context of Innovation (1996)
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:wsi:wschap:9789812796929_0005

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().