Managing Asymmetric Resource Dependence and Environmental Risk in Relationships by Real Options

Abstract

Asymmetric dependence in buyer-seller relationship is probably among the most widely studied phenomena in relationship research. However, the focus on asymmetric resource dependence has mainly addressed risks within the buyer-seller dyad and has largely disregarded external types of risk affecting relationships. This paper examines how to balance resources in relationships when there is inter-organizational dependence and when there is environmental risk. The author uses a formal real options model to analyze the effects of different types of risk having an impact on relationships and to determine an optimal management of relationships when there is asymmetric dependence and environmental risk. [ABSTRACT FROM AUTHOR]