Uncertainty and Value Appropriation: An Assessment of Resource-based Theory

This paper addresses the notion of uncertainty in resource-based theory by examining value appropriation as a cause of profit differentials among firms. It is shown that assumptions made within resource-based theory concerning the level of uncertainty in factor and product markets challenges the theory’s internal consistency and limits its ability to explain how economic value is distributed between seller and buyer. This paper suggests that integrating more elaborate notions of agency and uncertainty with resource-based theory has the potential of remedying some of these limitations