Explain with examples, the impact that the following concepts have on buyer behaviour and the governance mechanisms used to effect exchanges Custom Essay

Explain with examples, the impact that the following concepts have on buyer behaviour and the governance mechanisms used to effect exchanges: a. Asset Specificity, b. Information Asymmetry, c. Bounded Rationality , d. Opportunism

This question is fairly straightforward but requires structure and sound justification(s) and examples, backed up by unit concepts to receive anything close to full marks.

Each part of the discussion should receive the same mark consideration (6 marks). One mark may be added if you recognise that the question is dealing with ‘organisational buyer behaviour’ and is a departure from the economic approach where these ‘problems’ do not exist. Each one of these concepts is a departure from the neo-classical economic
approach.

Candidates should supply a very short definition for each of the concepts in (a) through to (d), and explain how each affects buyer behaviour and how buyers attempt to overcome these challenges and impose governance (or market) mechanisms to solve these challenges.

Candidates should also identify how all the concepts link up. Asset specificity increases the potential for opportunism and increases the likelihood that a governance mechanism or ‘deep relational’ transaction will occur. Bounded rationality increases the information asymmetry present in an exchange, etc.

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