Long-term contracts are LESS likely when:
A) specialized investments are important.
B) hold-up is likely.
C) the exchange environment is complex.
D) workers are paid based on piece rates.

Question

Quizplus · Accepted Answer

Long-term contracts are less likely when the exchange environment is complex because it is harder to predict future conditions and specify terms that will be relevant and fair over the long term. In complex environments, parties may prefer shorter contracts to allow for adjustments as circumstances change.

Long-Term Contracts Are LESS Likely When