Transparency, market operation and trust in the Dutch construction industry: an exploratory study

Johan Graafland and Andre Nijhof

Construction Management and Economics, 2007, vol. 25, issue 2, 195-205

Abstract: After the discovery of illegal price agreements in the Dutch construction industry, the government and major players in the sector have initiated a transition process towards more professional commercial relations. In the transition process transparency plays an important part, as it is a precondition for better market operation in the construction sector. However, there are significant disadvantages to a pursuit of transparency, such as higher costs and the risk of information overload. It is therefore necessary to find a good balance between more transparency and other ways to restore trust between key players in the construction sector. Especially complex products with a high degree of risk can best be dealt with through implicit contracts, in which trust is based on a mixture of the reputation mechanism, contracts that create a congruity of interests and the integrity of the contract partners.

Keywords: Transparency; market operation; trust; integrity; implicit contracts (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (4)

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DOI: 10.1080/01446190600830631

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