Abstract
One main problem with both acquisitions and alliances is separating the attractive partners from the rest. An additional problem with alliances is getting each partner to provide its best assets and efforts. One solution offered for the acquisition adverse selection problem is due diligence through a pre-acquisition alliance; however, none of the papers recommending such an approach analyze the alliance adverse selection and moral hazard problems. This paper presents the first formal model of joint venturing as acquisition due diligence, detailing how the joint solution works and under what conditions.
Similar content being viewed by others
Author information
Authors and Affiliations
Corresponding author
Additional information
revised version received October 20, 2003
Rights and permissions
About this article
Cite this article
Arend, R. Conditions for Asymmetric Information Solutions when Alliances Provide Acquisition Options and Due Diligence. JEcon 82, 281–312 (2004). https://doi.org/10.1007/s00712-003-0061-7
Received:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00712-003-0061-7