By William D. Nelson
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Extra info for Advances in Business & Management: Volume 2 (Advances in Business and Management)
In the end, a link-pin, with knowledge of both cultures and companies, was hired to solve the mutual adjustment problems. In general, striving for low contract transaction costs implies quick negotiations that result in a fair distribution of the rents. Transaction Management: Value Creation by Reducing Transaction Costs 21 The stage of control consists of the monitoring and enforcement of the contract. Both involve high transaction costs, especially at large distances. Monitoring means that business partners check whether the other party is doing what he or she promised to do.
G. den Butter enforce it (control). What do people indulge to accept these risks and to trust the other, or how can this risk be contaminated so trust can develop? To answer this question, two main types of trust generating mechanisms can be distinguished, respectively with a formal and an informal basis (Den Butter and Mosch, 2003, Mosch, 2004). In the case of formal trust we can for instance think of legal protection with respect to agreements between parties, where fines, or even the prospect of going to jail, can prevent opportunistic behaviour.
1177-1203. , and V. Trindade, 2002, Ethnic Chinese networks in international trade, The Review of Economics and Statistics, 84,pp. 116-130. , 1983, Reason in Human Affairs, Oxford: Basil Blackwell. , 1999, Trust: a Sociological Theory, Cambridge: Cambridge University Press. , 1988, The Theory of Industrial Organization, 1st edition, London: MIT Press. , 1995, The case of missing trade and other mysteries, American Economic Review, 85, pp. 1029-1046. , 1998, Trust and democratic governance, in Braithwaite, V.
Advances in Business & Management: Volume 2 (Advances in Business and Management) by William D. Nelson