A co-adoption model of interorganizational systems: Interdependent benefits and relative bargaining power

Kexin Zhao, Mu Xia, Michael Jeng-Ping Shaw

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

Interorganizational systems (IOSs) are an important source of firms' competitive advantages in the global economy. For any firm, the adoption of an IOS is a complicated strategic decision. While firms' relationship specific investments determine the total benefit generated by the system, their relative bargaining power affects the future value allocation. To investigate firms' optimal IOS adoption strategies, we develop a game theoretical model based on the asymmetric Nash Bargaining theory. Our analysis shows that it is easier to achieve superior supply chain level performance if trading partners have comparable bargaining power rather than unequal power. Firms under-invest in an IOS since they cannot internalize all benefits from their own efforts. While one firms' precommitment can reduce the underinvestment of the IOS, it will not change how benefits is divided between participating firms.

Original languageEnglish (US)
Title of host publicationAssociation for Information Systems - 12th Americas Conference On Information Systems, AMCIS 2006
Pages2543-2548
Number of pages6
Volume4
StatePublished - 2006
Event12th Americas Conference on Information Systems, AMCIS 2006 - Acapulco, Mexico
Duration: Aug 4 2006Aug 6 2006

Other

Other12th Americas Conference on Information Systems, AMCIS 2006
CountryMexico
CityAcapulco
Period8/4/068/6/06

Keywords

  • Bargaining power structure
  • Co-adoption
  • Interdependent benefits
  • Interorganizational systems
  • Precommitment

ASJC Scopus subject areas

  • Computer Science Applications
  • Computer Networks and Communications
  • Library and Information Sciences
  • Information Systems

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    Zhao, K., Xia, M., & Shaw, M. J-P. (2006). A co-adoption model of interorganizational systems: Interdependent benefits and relative bargaining power. In Association for Information Systems - 12th Americas Conference On Information Systems, AMCIS 2006 (Vol. 4, pp. 2543-2548)