scholarly journals Formal Contracts, Relational Contracts, and the Threat-Point Effect

2011 ◽  
Author(s):  
Hideshi Itoh ◽  
Hodaka Morita
Keyword(s):  
Relational Contracts ◽  
Threat Point

scholarly journals Formal Contracts, Relational Contracts, and the Threat-Point Effect

2015 ◽  
Vol 7 (3) ◽  
pp. 318-346 ◽  
Author(s):  
Hideshi Itoh ◽  
Hodaka Morita
Keyword(s):  
Driving Force ◽  
Relational Contracts ◽  
Specific Investment ◽  
Fixed Price ◽  
Product Delivery ◽  
Threat Point

We investigate whether formal contracts can help in resolving the holdup problem by studying repeated transactions between a seller and a buyer. Contrary to previous findings, we demonstrate that a simple fixed-price contract based on product delivery is of value even when relation-specific investment is purely cooperative. Furthermore, we show that focusing our attention on fixed-price contracts as a form of formal contracts is without loss of generality. The key driving force is a possibility that the relation-specific investment decreases the surplus under no trade. This possibility, although very plausible, has been largely ignored in previous analyses of the holdup problem. (JEL C78, D23, D86)

Governance of supplier-customer relations: An empirical review

2007 ◽  
Vol 158 (12) ◽  
pp. 406-416
Author(s):  
Jon Bingen Sande
Keyword(s):  
Transaction Cost ◽  
Empirical Research ◽  
Customer Relations ◽  
Transaction Cost Economics ◽  
Exchange Theory ◽  
Forest Industry ◽  
Relational Contracts ◽  
Relational Exchange ◽  
Exchange Relationships ◽  
Relational Exchange Theory

The forest industry is riddled with exchange relationships. The parties to exchanges may have diverging goals and interests, but still depend upon each other due to non-redeployable specific assets. Formal and relational contracts may be used to deal with the resulting cooperation problems. This paper proposes a framework based on transaction cost economics and relational exchange theory, and examines to what extent empirical research has found formal and relational contracts to deal with three different governance problems. To that end, I review the results from 32 studies in a range of settings. These studies generally support the view that exchanges characterized by high degrees of specific assets should be supported by formal and relational contracts.

scholarly journals The mirroring hypothesis: theory, evidence, and exceptions

2016 ◽  
Vol 25 (5) ◽  
pp. 709-738 ◽  
Author(s):  
Lyra J Colfer ◽  
Carliss Y Baldwin
Keyword(s):  
Problem Solving ◽  
Empirical Studies ◽  
Technical Problem ◽  
Digital Technologies ◽  
Organizational Form ◽  
Cognitive Resources ◽  
Relational Contracts ◽  
Industry Studies ◽  
Hypothesis Theory ◽  
Organizational Ties

Abstract The mirroring hypothesis predicts that organizational ties within a project, firm, or group of firms (e.g., communication, collocation, employment) will correspond to the technical dependencies in the work being performed. This article presents a unified picture of mirroring in terms of theory, evidence, and exceptions. First, we formally define mirroring and argue that it is an approach to technical problem-solving that conserves scarce cognitive resources. We then review 142 empirical studies, divided by organizational form into (i) industry studies, (ii) firm studies, and (iii) studies of open collaborative projects. The industry and firm studies indicate that mirroring is a prevalent pattern but not universal. However, in technologically dynamic industries, partial mirroring, where knowledge boundaries are drawn more broadly than operational boundaries, is likely to be a superior strategy. Firms can also strategically ‘break the mirror’ by implementing modular partitions within their boundaries, or by building relational contracts across their boundaries. Finally, studies of open collaborative projects, most of which focused on software, were not supportive of the hypothesis. We argue that digital technologies make possible new modes of coordination that enable groups to deviate from classical mirroring as seen in firms.

scholarly journals Relational contracts and specific training

2015 ◽  
Vol 69 (1) ◽  
pp. 51-62 ◽  
Author(s):  
James M. Malcomson
Keyword(s):  
Relational Contracts ◽  
Specific Training
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