E-Commerce

Lock-In Situations in Supply Chains: A Social Exchange Theoretic Study of Sourcing Arrangements in Buyer-supplier Relationships

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Executive Summary

Social exchange theory is used to gain a better understanding of the relationship between a buyer and a supplier that is characterized by lock-in situations. The authors begin by reviewing the theoretical foundations of social exchange theory. Next, they use an illustrative multinational business example from a Danish Business Group to demonstrate the complexities of the lock-in situation. Conjectures related to lock-in behaviors are initially developed and then examined by means of a game-theoretic model. The analysis provides a basis for the development of propositions which are examined employing a behavioral experiment.

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