We investigate the role of mutual trust in long-term vertical relationships involving trades of complex goods. High … complexity is associated with high contract incompleteness and hence the increased relevance of trust-based relational contracts …. Contrary to expectations, we find that changes in trust do not impact the quality of highly complex objects. Instead, higher …

, we show that more trust in a relationship is associated with higher idiosyncratic investment by suppliers and better part … relationships involving higher trust, buyers are able to induce higher investment and more intense competition among suppliers - but …

data from a survey focusing on these, we show that more trust, the belief that the trading partner acts to maintain the …