Information Networks As A Safeguard From Opportunism In Industrial Supplier-Buyer Relationships

The network idea has been gaining growing attention in the last decades. We analyse the applicability of networks as a mechanism that protects suppliers from buyers’ opportunism. So-called information networks can function as a safeguard for dependent suppliers by reducing information asymmetries among the networking parties and by developing group norms. To confirm this hypothesis, we conduct an empirical study. The results show that information networks can provide protection for a dependent supplier if information about a buyer’s unfair behaviour is credible, and if as a result this buyer suffers a considerable loss of reputation.