Source:
Journal of Management Information Systems, Volume 21, Issue 2, p.87-108 (2004)
Keywords:
economic analysis of information, incomplete contracts, information sharing, intellectual property, managing risks, transaction cost theory
Abstract:
We address the concept of poaching, the risk that in any transactional
relationship, information that is transferred between parties for purposes specified in
the contract will deliberately be used by the receiving party for purposes outside the
contract, to its own economic benefit, and to the detriment of the party that provided
the information. We argue that this form of transactional risk, a component of transaction
costs, is increasingly important in our service-centered, information-driven,
postindustrial economy. Using case examples and a discussion of the related literature,
we demonstrate and discuss the conditions under which shared information creates
the potential for poaching, examine the impact and efficacy of traditional remedies
for contractual problems in managing poaching, and identify additional mechanisms
for managing poaching risk. Our analysis suggests that these risks and their remedies
are fundamentally different in nature from those considered in previous theories of
supplier relations and contractual governance.