An Empirical Investigation of Interorganizational Opportunism and Contracting Mechanisms
AbstractThis study investigates contracting mechanisms in situations of opportunistic disputes between organizations. The authors specifically explore the relationships between the formal versus informal nature of opportunism and the formal versus informal nature of contractual governance. They use a unique data set of 102 buyer– supplier disputes to explore in depth different types of opportunism – that is, strong form versus weak form opportunism – and different types of contracting mechanisms – that is, the controlling and coordinating functions of formal contracts and the cooperative and competitive sides of relational contracts. The authors’ detailed empirical analysis suggests distinct relationships between the different contracting mechanisms, the different types of opportunism, and the level of legal fees necessary to deal with the dispute. From these findings the authors derive implications for research on the role of contractual mechanisms in dealing with interorganizational opportunism.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 38362.
Date of creation: 2012
Date of revision:
Formal contract; Legal fees; Opportunism; Relational contract; Vertical relationship;
Find related papers by JEL classification:
- D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- K12 - Law and Economics - - Basic Areas of Law - - - Contract Law
- K1 - Law and Economics - - Basic Areas of Law
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-05-08 (All new papers)
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