While a broad branch of literature deals with the development of buyer-supplier relationships, limited research exists under which circumstances a buyer should terminate such a relationship and switch to a new supplier. Recently, Wagner and Friedl (2007) have developed a framework to analyze a...

Applying a real option approach, this paper examines how asymmetric information alters key variables of a firm’s supplier switching process, such as the timing of contracting (hurried versus delayed contracting), transfer payments, set-up, switching, and abandonment decisions. In a symmetric...