On the value of partial commitment for cooperative investment in buyer-supplier relationship

José de Sousa (1, 2) , Xavier Fairise (3, 4)

1 CES - Centre d'économie de la Sorbonne
2 ADIS - Analyse des Dynamiques Industrielles et Sociales
3 TEPP - Travail, Emploi et Politiques Publiques
4 GAINS - Groupe d'Analyse des Itinéraires et des Niveaux Salariaux

Does formal contracting foster cooperation in a buyer-supplier relationship? In line with the literature, we find that a renegotiable contract with relationshipspecific 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 can. This result may help to understand how cooperation emerges in Japanese procurement practices, which typically involve relationshipspecific joint investments and renegotiable contracts.

Mots clés: incomplete contracts; relationship-specific investments; cooperation

Domaines: Economies et finances

José de Sousa, Xavier Fairise. On the value of partial commitment for cooperative investment in buyer-supplier relationship. 2013. ⟨halshs-00870060⟩