Strategic Alliances

    What are some examples of transaction costs that we as individuals bear in our everyday lives?

    If you were a home builder, wishing to buy lumber and other building materials repeatedly, how do your transaction costs escalate?

    What according to “Transaction Cost Theory” explains why firms enter into strategic alliances? Use examples as appropriate (if necessary, frame your examples in the context of a home builder needing to buy materials on an ongoing basis.

    What are the four primary incentives that motivate firms to enter into strategic alliances? For each one, give a simple example (factual or conceptual) that illustrates the principle.