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Repeated Interactions and Contractual Detail: Identifying the Learning Effect

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  • Bart S. Vanneste

    (London Business School, University of London, London NW1 4SA, United Kingdom)

  • Phanish Puranam

    (London Business School, University of London, London NW1 4SA, United Kingdom)

Abstract

Organizations interacting repeatedly on similar transactions may learn from prior experiences, allowing contracts to be specified in greater detail. In this study, we analyze the conditions under which this learning effect is most likely to manifest itself. We do this by focusing on different parts of a contract as well as differences across transacting parties. Using a survey of information technology procurement contracts from 788 Dutch small- and medium-sized enterprises, we show that the learning effect is stronger for technical than for legal detail in contracts and is stronger for firms with information technology expertise than for firms without such expertise.

Suggested Citation

  • Bart S. Vanneste & Phanish Puranam, 2010. "Repeated Interactions and Contractual Detail: Identifying the Learning Effect," Organization Science, INFORMS, vol. 21(1), pages 186-201, February.
    • Handle: RePEc:inm:ororsc:v:21:y:2010:i:1:p:186-201
    DOI: 10.1287/orsc.1080.0402
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