Sprott Research Seminar: Dr. Jeffrey Reuer

We invite you to join us at the next Sprott Research Seminar with Dr. Jeffrey Reuer, Fulbright Canada Distinguished Chair at the Sprott School of Business. Dr. Reuer will be giving a talk entitled ‘Temporal Dynamics of Risk Allocation and Contracting in Startups’ Interorganizational Relationships’.

Abstract

We bring information economics and signaling theory to the study of contracts supporting interorganizational relationships by investigating how startups and their partners allocate risk in their deals.  We demonstrate several unique and interesting temporal patterns and tradeoffs that startups encounter in contracting.  All else equal, startups receive worse terms in their first deals compared to later ones, and this is especially so when they collaborate with a prominent firm.  However, their subsequent deals are also better when their first relationship is with a prominent organization.  Lacking such affiliations, they can also obtain better terms in subsequent deals when they are able to demonstrate superior capabilities in their first collaboration.  Empirical evidence shows that the effects of signals and demonstrable capabilities persist yet later diminish in subsequent contracts as information accumulates on the startup.  Our theory and findings complement other theories and research on contractual safeguards in interorganizational relationships, and we highlight the risks and opportunities startups face in contracting over time.

Biography

Dr. Jeffrey Reuer is the Guggenheim Endowed Chair and Professor of Strategy, Entrepreneurship and Operations at the Leeds School of Business (University of Colorado Boulder). His research is focused on governance and design of alliances, collaborative strategies, and applications of information economics and real options theory to various problems in strategy, international business and entrepreneurship. You can view his full biography here.