When relationship-specific exchange occurs in complex contractual environments,the best way to purchase inputs is through:
A) spot markets.
B) vertical integration.
C) short-term agency agreements.
D) long-term contracts.

Question

Quizplus · Accepted Answer

Vertical integration is often the best approach in complex contractual environments with relationship-specific exchanges, as it allows for better coordination and control over the production process, reducing the risks associated with opportunistic behavior and contract renegotiation.

When Relationship-Specific Exchange Occurs in Complex Contractual Environments,the Best Way