The influence of inertia on contract design: contingency planning in information technology service contracts

Kyle J. Mayer and Janet Bercovitz
Additional contact information
Kyle J. Mayer: University of Southern California, Los Angeles, CA, USA, Postal: University of Southern California, Los Angeles, CA, USA
Janet Bercovitz: University of Illinois at Urbana-Champaign, Champaign, IL, USA, Postal: University of Illinois at Urbana-Champaign, Champaign, IL, USA

Managerial and Decision Economics, 2008, vol. 29, issue 2-3, 149-163

Abstract: This paper examines whether the prior relationship between two firms produces an inertial drag that influences contracts used for subsequent exchanges. Using data from the information technology services industry, we examine whether inertia develops during the relationship between firms in how they plan for contingencies. While attributes of the current exchange do play a role, we find that the prior relationship between the firms has a constricting effect on future contracts. Prior relationships can create what we call interorganizational inertia, which leads firms to use the same level of contingency planning in current exchanges that they used in prior contracts. Copyright © 2008 John Wiley & Sons, Ltd.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://hdl.handle.net/10.1002/mde.1390 Link to full text; subscription required (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:mgtdec:v:29:y:2008:i:2-3:p:149-163

DOI: 10.1002/mde.1390

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().