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We study how informal buyer-supplier relationships in the German automotive industry affect procurement. Using unique data from a survey focusing on these, we show that more trust, the belief that the trading partner acts to maintain the mutual relationship, is associated with both higher...
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This paper studies the effect bargaining power has on self-enforcing contracts. Optimal contracts are characterized under three enforcement regimes. When enforcement is absent, I show that as the agent's bargaining power increases, her incentive payments decrease even though her total...
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power should affect only price and not nonprice terms of a contract. In contrast, practitioners and commentators in industry … regularly invoke bargaining power to explain static and dynamic variance in nonprice contract terms. This Article unpacks and … effect of bargaining power on contract design. These include the effects of shifts in market supply and demand and the effect …
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