Publication: Contracting between Firms: Empirical Evidence
Contracting between Firms: Empirical Evidence
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Iyer, R., & Sautner, Z. (2018). Contracting between Firms: Empirical Evidence. The Review of Economics and Statistics, 100, 92–104. https://doi.org/10.1162/rest_a_00648
Abstract
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We analyze contracts between a large buyer and her suppliers. We find that contracts with critical product suppliers contain more clauses that address moral hazard, primarily through monitoring. If holdup concerns are larger, there are more contractual protections against it. Over time, contracts with the same supplier include additional provisions that address moral hazard through monitoring. This dynamic effect is strongest for service contracts, where observability and verifiability are initially lower. Our findings indicate that c
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- Iyer, Rajkamal
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Citations
Iyer, R., & Sautner, Z. (2018). Contracting between Firms: Empirical Evidence. The Review of Economics and Statistics, 100, 92–104. https://doi.org/10.1162/rest_a_00648
