Based on data from a comprehensive benchmarking study on buyer-supplier relationships in the German automotive industry, we show that more trust in a relationship is associated with higher idiosyncratic investment by suppliers and better part quality - but also with more competition among...

The paper studies agents' investment decisions between general and specific investments under different ownership structures in a thin, decentralized market where each agent's decision affects the decisions and welfare of other (otherwise unrelated) agents mainly through indirect market...