Completing Contracts Ex-post : How Car Manufacturers Manage Car Dealers

@inproceedings{Arruada2004CompletingCE,
  title={Completing Contracts Ex-post : How Car Manufacturers Manage Car Dealers},
  author={Benito Arru{\~n}ada},
  year={2004}
}
This article illustrates how contracts are completed ex post in practice and, in so doing, indirectly suggests what the real function of contracts may be. Our evidence comes from the contracts between automobile manufacturers and their dealers in 23 dealership networks in Spain. Franchising dominates automobile distribution because of the need to decentralize pricing and control of service decisions. It motivates local managers to undertake these activities at minimum cost for the manufacturer… CONTINUE READING

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