Partnering and contracting

Kristian Ditlev Bohnstedt

Research output: Contribution to book/anthology/report/conference proceedingConference abstract in proceedingResearchpeer-review

Abstract

Purpose - Partnering is often, by economists, and construction managerial literature related to more incomplete contracts. This can be explained by seeing partnering as something that neutralizes opportunism. The aim is to uncover whether partnering neutralizes opportunism when there is an incomplete contract or reduces transaction costs for renegotiation of complete contracts when new information arises.
Design - The study is a cross-sectional design comprising document analysis and interviews.
Findings - Firstly that partnering does not necessarily entail more incomplete contracts, which contradicts the incomplete contracting theory. Secondly, in complete contract setting partnering can be motivated when seen as a willingness to renegotiate complete contracts i.e. partnering lowers transaction costs for renegotiation. Partnering can make it rational for one party to accept disadvantageous outcomes with the conception of being repaid later in accordance to reciprocity.
Value - Seeing partnering as the willingness to renegotiate complete contracts can reduce the risk for the contractor and lead to lower prices for a given service.

Keywords Partnering, Contracting, Pareto efficiency, Reciprocity, Construction
Original languageDanish
Title of host publicationTG59 “People in Construction” : Proceedings TG59 “People in Construction” Conference, Port Elizabeth, South Africa
Place of PublicationSouth Africa
PublisherNelson Mandela Metropolitan University
Publication date6 Apr 2014
Publication statusPublished - 6 Apr 2014

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