Formal contracting addresses the moral hazard problems inherent in interfirm deals via explicit terms designed to achieve incentive alignment. Alternatively, when firms expect to interact repeatedly, relational mechanisms may achieve similar results without the associated costs. However, as we...

We develop a model in which the parties to a joint production project have a choice of specifying contractual performance in terms of actions or deliverables. Penalties for noncompliance are not specified; rather, they are left to the courts under the legal doctrine of compensatory damages. We...

We examine technology alliance contracts in detail, to explore if formal contract terms vary with prior alliances. Traditionally, formal governance has been viewed as the means to address the coordination difficulties inherent in alliances, via explicit contractual mechanisms. Formal...