Cooperation and Conflict: A Law and Economics Analysis of Meta-Organizations

Over the second part of the twentieth century inter-firm cooperations have become an increasingly popular phenomenon. These inter-firm cooperations often play out in the form of meta-organizations, which are organizations that are composed of the cooperating organizations. This thesis offers a new Law and Economics view on meta-organizations, contrasting meta-organizations with employment-based organizations in terms of the benefits and obligations involved. By integrating aspects from the fields of Law and Economics and Organization Science, the thesis contributes to the understanding of meta-organizations and their governance. Meta-organizations can be characterized as a hybrid between market and hierarchy. Because of their hybrid form, meta-organizations are different from employment based organizations. This difference originates from their distinct membership compositions, and the associated rewards and obligations. The distinct nature of the obligations and rewards in meta-organizations impedes the applicability of governance mechanisms that are well established for employment-based organizations, such as the instruments building on formal authority or corporate governance. As a consequence, meta-organizations require specific governance mechanisms. This thesis presents two examples of such governance mechanisms. Third party decision making is viewed as an integral part of the meta-organization, implying that in this context arbitrators, for example, are a complement rather than a substitute to ordinary courts. Group selection may be relevant for cooperation within meta-organizations, with a larger pool of groups fostering cooperation through self-sorting of parties according to their willingness to cooperate, but also hindering cooperation due to coordination costs of finding a suitable group. This thesis has built upon insights from both Law and Economics and Organization Science in order to shed new light on the governance of meta-organizations. The findings of this thesis, based on an integrated use of multiple disciplines, show the relevance of broadening the paradigm within Law and Economics beyond neoclassical economics.