Market structure influences contractual relationships more than previously thought.
The article explores how transaction costs in business relationships are influenced by factors like how often exchanges happen, how much is invested in specific relationships, and how uncertain the environment is. By studying firms in different industries, the researchers found strong support for the idea that these factors affect how companies make contracts. They also discovered that the structure of the market, like how many other sellers and buyers there are, plays a big role in shaping these relationships.