The Role of Repeated Interactions , Self-Enforcing Agreements and Relational [ Sub ] Contracting : Evidence from California Highway Procurement Auctions

@inproceedings{Gil2009TheRO,
  title={The Role of Repeated Interactions , Self-Enforcing Agreements and Relational [ Sub ] Contracting : Evidence from California Highway Procurement Auctions},
  author={Ricard Gil and Justin Marion},
  year={2009}
}
We examine the impact of relationships between contractors and subcontractors on firm pricing and entry decisions in the California highway procurement market using data from auctions conducted by the California Department of Transportation. Relationships in this market are valuable if they mitigate potential hold-up problems and incentives for ex post renegotiation due to contractual incompleteness. An important characteristic of informal contracts are that they must be self-enforcing, so that… CONTINUE READING

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