This study investigates contracting mechanisms in situations of opportunistic disputes between organizations. We specifically explore the relationships between the formal versus informal nature of opportunism and the formal versus informal nature of contractual governance. We use a unique data...

Motivated by challenges facing IT procurement, this paper studies a hybrid procurement model where a reverse auction of a fixed-price IT outsourcing contract may be followed by renegotiation to extend the contract's scope. In this model, the buyer balances the need to incentivize...

In a property-rights framework, we study how the organizational form and quantity contracts interact in generating investment incentives. Our model nests standard property-rights and hold-up models as special cases. We admit general message-dependent contracts but provide conditions under which...

The paper studies a generic bilateral trade model with relationship-specific investments. Only the seller invests, and subsequent trade becomes inefficient if his investments are too low. We show that the seller may defect strategically under a fixed-price contract even though he attains any...

I analyse firms organisational choices when they face uncertainty about institutional conditions in foreign locations with heterogeneous final good producers and incomplete contracts. As firms learn about the conditions abroad, the increasing offshoring activity increases competition in the...

We hypothesize that trust is a moderator of the direct relationship between control and coordination concerns and the extent of contracting. Our results suggest that high trust weakens the positive relationship between control concerns and the extent of contracting, but reinforces the positive...

Relational contracts - informal agreements sustained by the value of future relationships – are integral parts of global production processes. This paper develops a repeated-game model of global sourcing in which final goods producers decide whether to engage with their suppliers in relational...

This paper characterizes the optimal contracts issued to suppliers when delivery is subject to disruptions and when they can invest to reduce such a risk. When investment is contractible dual sourcing is generally optimal because it reduces the risk of disruption. The manufacturer (buyer) either...

We examine a model of contracting where parties interact repeatedly and can contract at any point in time, but writing enforceable contracts is costly. A contract can describe contingencies and actions at a more or less detailed level, and the cost of writing a contract is proportional to the...