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Antecedents of Intentionally Incomplete Inter-Firm Contracts

Author

Listed:
  • Marina Fiedler

    (University of Passau)

  • Carolin Blank

    (Alvarez & Marsal, One Finsbury Circus, London EC2M 7EB)

  • Arnold Picot

    (Ludwig-Maximilians-University Munich)

Abstract

We investigate (1) whether frms deliberately write incomplete contracts, and (2) if so, under which conditions. a better understanding of this phenomenon is important, because research shows that incomplete contracts can yield higher results than fully specifed ones. p]We investigate these questions using the grounded theory methodology developed by Glaser and Strauss, and specifcally the Straussarian version. We conducted thirty-seven semi-structured in-depth interviews with executives from diferent industries who negotiate contracts. We found that, given a confdent view of the world, executives are willing to write incomplete inter-frm contracts under the following circumstances: a) they have a confdent attitude towards their environment, b) they trust their contracting partner, c) the power relationship between the companies is equal, and d) the value of the contract is relatively low, i.e., of minor strategic importance.

Suggested Citation

  • Marina Fiedler & Carolin Blank & Arnold Picot, 2010. "Antecedents of Intentionally Incomplete Inter-Firm Contracts," Schmalenbach Journal of Business Research, Springer, vol. 62(62), pages 133-157, January.
    • Handle: RePEc:spr:sjobre:v:62:y:2010:i:62:d:10.1007_bf03373750
    DOI: 10.1007/BF03373750
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    More about this item

    Keywords

    L14L24 D86 J41;

    JEL classification:

    • D86 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Economics of Contract Law
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts

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