Title data
Fischer, Christian:
Optimal Payment Contracts in Trade Relationships.
In: International Economic Review.
Vol. 64
(2023)
Issue 4
.
- pp. 1649-1683.
ISSN 0020-6598
DOI: https://doi.org/10.1111/iere.12636
Abstract in another language
In buyer–seller relationships, offering trade credit to buyers fosters long-term collaboration but seller provision varies systematically as relationships evolve. We study the optimal provision dynamics of trade credit when the seller's information about the buyer is incomplete. We show how the interaction of self-enforcing relational contracts and formal contracts determines optimal payment contract choice. We find that payment contracts can be interpreted as screening technologies and imply distinct learning opportunities about the buyer's type. In line with empirical evidence, the model predicts that all transitions between payment terms lead to seller trade credit provision in the long run.
Further data
Item Type: | Article in a journal |
---|---|
Refereed: | Yes |
Institutions of the University: | Faculties > Faculty of Law, Business and Economics > Department of Economics > Junior Professor International Economics Faculties Faculties > Faculty of Law, Business and Economics Faculties > Faculty of Law, Business and Economics > Department of Economics |
Result of work at the UBT: | Yes |
DDC Subjects: | 300 Social sciences > 330 Economics |
Date Deposited: | 16 Dec 2023 22:00 |
Last Modified: | 21 Dec 2023 07:59 |
URI: | https://eref.uni-bayreuth.de/id/eprint/88066 |