Artikel
OPTIMAL PAYMENT CONTRACTS IN TRADE RELATIONSHIPS
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.
- Language
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Englisch
- Bibliographic citation
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Journal: International Economic Review ; ISSN: 1468-2354 ; Volume: 64 ; Year: 2023 ; Issue: 4 ; Pages: 1649-1683 ; Hoboken, NJ: Wiley
- Classification
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Wirtschaft
- Event
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Geistige Schöpfung
- (who)
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Fischer‐Thöne, Christian
- Event
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Veröffentlichung
- (who)
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Wiley
- (where)
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Hoboken, NJ
- (when)
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2023
- DOI
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doi:10.1111/iere.12636
- Last update
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10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Fischer‐Thöne, Christian
- Wiley
Time of origin
- 2023
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