Interaction between explicit contracts and implicit contracts in RJVs

DOI

10.2991/assehr.k.201214.673How to use a DOI?

Keywords

explicit contract, implicit contract, repeated game, contracting cost

Abstract

With the rapid development of economic globalization and science and technology, multinational companies have become less and less advantage to develop R & D activities separately, with the necessary knowledge and skills in various fields increasing in difficulty and depth for a single company. At the same time, entrepreneurs have realised that it can improve the adverse situation effectively to organize a new organizational model in the cross-sectoral, cross-industry. Research Joint Ventures achieve this desire for the Organizations with the risk-sharing and economies of scale and scope, the cost of inputs-sharing and avoiding unnecessary duplication of R & D. Due to the different areas, traditional practices, corporate culture and beliefs of the members of the RJVs, the function of explicit contract within the RJVs members seems not very obvious. However, implicit contract, which includes trust, reputation, expected value of cooperation and culture, can make up for the lack of explicit contracts. Then analysises the coodination machanism of explicit contract and implicit contract in the RJVs in order to achieve high effectiveness and efficiency of the contract.The conclusion is that contracting cost affects contract choice and the interaction between explicit contract and implicit contract.When contracting cost is low, interaction between explicit contracts and implicit contracts is substitute, when contracting cost is medium, explicit contract complements implicit contract.when contract cost is high, explicit contract does not work. Last, According to the above theory, gives the relevant policy recommendations.

Copyright

© 2020, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Hanxing Jia
PY  - 2020
DA  - 2020/12/16
TI  - Interaction between explicit contracts and implicit contracts in RJVs
BT  - Proceedings of the 2020 3rd International Conference on Humanities Education and Social Sciences (ICHESS 2020)
PB  - Atlantis Press
SP  - 1090
EP  - 1093
SN  - 2352-5398
UR  - https://doi.org/10.2991/assehr.k.201214.673
DO  - 10.2991/assehr.k.201214.673
ID  - Jia2020
ER  -