Collaborative Alliances in Agriculture Under Distrust

Abstract

Goyal and Joshi (2003) proved that when firms form collaborative alliances
with the objective of reducing production costs, the unique stable
architecture of collaboration is the complete network (i.e. a network in which
all firms have a collaborative alliance with one another). This article shows
that this result does not hold when firms face distrust among potential
partners. Since researches have identified distrust as an important feature in
agriculture, this finding suggests that the formation of beneficial
collaborative alliances in this sector requires political intervention.