Do we need handshakes to cooperate in buyer-supplier relationships?

José De Sousa () and Xavier Fairise ()

No 210389, Working Papers from Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2)

Abstract: Does formal contracting foster cooperation in a buyer-supplier relationship? In line with the literature, we find that a renegotiable contract with relationship-specific joint investments does not make it possible to reach the first-best. However, we show that a renegotiable contract may induce more cooperation than an informal arrangement. This result may help to understand how cooperation emerges in Japanese procurement practices, which typically involve relationship-specific joint investments and renegotiable contracts.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Pages: 35
Date: 2010
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https://ageconsearch.umn.edu/record/210389/files/WP%20SMART-LERECO%2010.13.pdf (application/pdf)

Related works:
Working Paper: Do we need handshakes to cooperate in buyer-supplier relationships? (2010)
Working Paper: Do we need handshakes to cooperate in buyer-supplier relationships? (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:inrasl:210389

DOI: 10.22004/ag.econ.210389

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