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To recognize and investigate the hypotheses that opportunistic behaviour of project participants in infrastructure public–private partnerships (PPPs) changes over the project’s life cycle. Case study methodology is adopted. The first Indian highway PPP project, awarded with negative grant, is used as the case context. Opportunistic behaviour is a continuous game played by the project stakeholders. Its manifestation depends on the vulnerability of the other party at that point in time in the project life cycle and the past display of opportunism. Because the study is limited to a highway project in an emerging economy, the findings may lack generalizability for which further research is recommended. PPP is increasingly popular. Stakeholders recognize that the existing ex-ante contractual arrangements that seek to mitigate opportunism are not enough for project success. This study addresses this difficulty by providing a closer understanding of how opportunistic behaviours evolve over projects’ life cycle and what steps are necessary to negotiate. Failure to address the antecedents of opportunistic behaviour in time leads to a competition to be more opportunistic, in which the common public gets short changed. This study is an attempt to advance understanding of stakeholders’ behaviour outside the ambit of contract. The extant literature is largely silent on the timing and vulnerability of opportunistic behaviour, viewing it as a static concept. The study demonstrates the changing nature of opportunism that manifests in different forms over the projects life cycle.

Economic assumptions of self-interest and opportunism have sparked a debate about their impact on management behavior. This paper addresses this debate in the context of US hospitals. More specifically, the paper addresses whether self-interest and opportunistic behavior describe pre-existing behavior in hospitals. Our analysis concludes that there is no evidence that opportunism was an underlying industry wide behavior prior to the 1980s when economic theories began to shape policies and the industry. While we cannot determine from the evidence why it emerged, it may be linked to system incentives to reduce costs and/or the propagation of economic theories in health administration programs and business schools. Consequently, there is a necessity for on-going debate and future empirical research on this topic.

Hirschman has repeatedly stated that Voice is better than Exit as citizens or clients response to dissatisfaction with the service provided by organizations of various nature. He also maintained that all too often Exit was preferred to Voice and the negative result would be that services of worse quality will be supplied in the system as a whole.

Unfortunately, Hirschman never formalized his powerful categories and his fascinating ideas. The paper is an attempt to fill this gap; it also aims at showing how helpful Hirschaman’s approach can be in the endeavour to design efficient institutions.

This paper provides a definition of efficiency convenient for our purposes and presents a model where both Exit and Voice can be necessary in order to achieve efficient results, given that the decline of organizations can have several different originating factors. Then it identifies the analytical conditions under which Exit is spontaneously chosen by citizens or clients despite being less efficient than Voice. The paper shows that the use of Exit when Voice would be more efficient is not as general as Hirschman seemed to imply but it can arise under well-specified circumstances. In its final part, the paper suggests how institutions should be designed in order to prevent such inefficient results.

Purpose — This chapter aims to argue that in some cases, dishonesty in international partnerships may be beneficial from the dishonest firm’s perspective.Design/methodology/approach — The chapter is based on three cases of dishonest Chinese firms that cheated their American or German partners.Findings — We argue that dishonesty does not always lead to negative consequences for the dishonest/opportunistic firm and if it does, benefits may be larger than costs.Practical implications — It is not always easy to avoid partners’ dishonest behavior especially if they hope to benefit considerably from this and if the probability of getting caught and punished is low.Originality/value — The consequences of dishonesty in international partnerships — especially, relationship dissolution and positive impacts of dishonesty for the dishonest firm — have not received considerable research attention yet. We argue that despite relationship dissolution caused by the Chinese partners’ dishonesty, two of the dishonest firms gained.

This chapter addresses social embeddedness effects on ex ante management of economic transactions. We focus on dyadic embeddedness, that is the history of prior transactions between business partners and the anticipation of future transactions. Ex ante management through, for example, contractual arrangements is costly but mitigates risks associated with the transaction, such as risks from strategic and opportunistic behavior. Dyadic embeddedness can reduce such risks and, hence, the need for ex ante management by, for instance, making reciprocity and conditional cooperation feasible. The chapter presents a novel theoretical model generating dyadic embeddedness effects, together with effects of transaction characteristics and management costs. We stress the interaction of the history of prior transactions and expectations of future business. Hypotheses are tested using new and primary data from an extensive survey of more than 900 purchases of information technology (IT) products (hard- and software) by almost 800 small- and medium-sized enterprises (SMEs). Results support, in particular, the hypotheses on effects of dyadic embeddedness.

This chapter offers a distinction between traditional bureaucracy and an emerging organizational form, which we call positive organization, a byproduct of intervention techniques such as appreciative inquiry. We suggest that the root of the distinction lies in positive organization's greater reliance on a heretofore underexploited institutional pillar (Scott, 2001), which we label the relational–emotional. The relational–emotional pillar, unlike its regulative, normative and cultural-cognitive counterparts, owes its potency to attachment phenomena (Bowlby, 1969). We expand on the distinction by viewing the positive organization as one of three aspects of Ouchi's clan form, the other two being normative bureaucracy and cognitive bureaucracy. We conclude with a contingency theory of transaction cost reduction. Regulative (traditional) bureaucracy is most effective in reducing transaction costs when environmental uncertainty and vulnerability to opportunism are both moderate, normative bureaucracy when environmental uncertainty is moderate but vulnerability to opportunism is high, cognitive bureaucracy when environmental uncertainty is high but vulnerability to opportunism is moderate, and positive organization when both environmental uncertainty and vulnerability to opportunism are high.

Constructing a theory of the legitimacy of groups, especially groups that mobilize the resources of their own members and provide pure or impure public goods such as collective action, raises some questions not encountered by theories of the legitimacy of acts, persons, or positions. Among these are: First, groups are typically nested in other groups. Groups nested in other groups may differ from each other both in their situations of action and in the larger social framework of norms, values, beliefs, practices, and procedures that guide action in them; or, in other words, in the two chief sources of their legitimacy. Does this pose a problem for the legitimacy of groups? If it does, with what consequences and under what conditions? Second, groups that mobilize the resources of their members for the purpose of providing them with pure or impure public goods have problems of both agency and collective action. Problems of agency and collective action make compliance with the claims made by the group on the resources of its members problematic. Even those willing to comply with them may be deterred by fear of the opportunism of others. Under what conditions do those who would be willing to comply were it not for fear of opportunism by others actually comply? Third, legitimacy is in some sense a resource. It is a characteristic instrumental to the mobilization of resources by a group. But is it a resource like any other? Absent land, labor, capital, technology or organization, does it matter how much legitimacy a group has? If not, what is the relation between legitimacy and resources?

Entrepreneurship is a key factor in the growth of regions, given its impact on innovation and job creation. The relationship between start-up companies and their environment is closely linked to negotiation mechanisms since the formation of trust, the governance structure, and how entrepreneurs protect themselves from adverse situations depend on them. However, no single framework can bring together the bargaining, entrepreneurship, and institutional factors that determine the success or failure of start-ups. The objective of this chapter is to jointly analyze bargaining and entrepreneurship through the theory of economic institutionalism, Transaction Cost Theory, and Cognitive Organization Theory. To this end, an analytical scheme is proposed that brings together these precepts applied theoretically to the Latin American case. The scope is to provide a novel framework of analysis by incorporating essential institutional elements for negotiation, such as contracting, governance, organizational structure, trust, relational risks, and hedging against opportunism.

The purpose of this theoretical chapter is to rework a promising but limited theory of the foundations of reciprocity. Reciprocity is often attributed to an “internalized norm of reciprocity” – a deeply felt moral obligation to help those who have helped us in the past. Leifer's theory of local action develops a radically different and compelling foundation for reciprocity – one in which the impetus for reciprocity is a thinly veiled battle for status. We rework the theory to offer a new one that addresses its limitations. The key idea is that the impetus for reciprocity is the desire to signal that one intends to create joint value rather than to capture it from the counterparty.

Our analytical approach rests on close examination of a puzzling and underrecognized feature of social exchange: people who initiate social exchange routinely deny giving anything of value (“it was nothing”) while the receiver inflates their indebtedness to the giver (“this is too much!”). We refer to this negotiation strategy as reverse bargaining and use it as a window into the logic of social exchange.

We develop a more general theory of how people manage the threat of opportunism in social exchange that subsumes local action theory. The key insight is that people who initiate social exchange and seek reciprocity must balance two competing objectives: to ensure that the person receiving a benefit recognizes a debt she must repay; and to mitigate the receiver's suspicion that the giver's ulterior motive is to capture value from the receiver.