While some argue that incomplete incentive contracts facilitate the self-enforcement of informal dealings, other authors submit that they substitute for or 'crowd out' social norms supporting informal arrangements. We use experimental evidence to test these theories by manipulating the extent to...

When there are constantly new, valuable opportunities to transact with alternative partners — a situation we refer to as exchange value uncertainty — long-term or committed transactions among the same individuals are discouraged. But when opportunism creates exchange hazards, which escalate in...

We suggest and provide empirical evidence that the bargaining power of alliance partners stemming from their prominence in alliance networks influences the ex-ante allocation of value capturing rights in high-tech alliance contracts. Network prominence can enhance the availability of alternative...

While transaction cost economists have generally argued that hazardous exchange conditions warrant complex contracts or vertical integration, other scholars have argued that trust or relational forms of governance effectively support exchange. These scholars view relational governance as a...