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Individualism, Collectivism, and Opportunism: A Cultural Perspective on Transaction Cost Economics

Chao C. Chen

Rutgers University & New York University, 31 Sandalwood Drive, Edison, NJ 08820, USA, cchen{at}stern.nyu.edu

Mike W. Peng

Fisher College of Business, The Ohio State University, 732 Fisher Hall, 2100 Neil Avenue, Columbus, OH 43210, USA, peng.51{at}osu.edu

Patrick A. Saparito

Whittemore School of Business and Economics, University of New Hampshire, 15 College Road, McConnell Hall, Durham, NH 03824, USA, psaparito{at}aol.com

Researchers criticize the transaction cost economics (TCE) paradigm for over-generalizing the assumption of opportunism as human nature. We suggest that opportunistic propensity is affected by cultural prior conditioning of individualism-collectivism (I-C). Specifically, we propose that individualists have a higher opportunistic propensity in intra-group transactions, and collectivists in inter-group transactions. Our cultural specification of opportunism helps TCE to more effectively accommodate some criticisms and more realistically deal with problems of economic organization in today’s global economy.

Journal of Management, Vol. 28, No. 4, 567-583 (2002)
DOI: 10.1177/014920630202800405
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