Power and selection of contract terms: The case from the Brazilian orange juice sector


Autoria(s): Ito,Nobuiuki Costa; Zylbersztajn,Decio
Data(s)

01/03/2016

Resumo

ABSTRACT We propose a model to explain how contract terms are selected in the presence of a form of economic power: contract power. The orange juice sector is used to illustrate an analysis that demonstrates the effects of contract power on the economic organization of the sector. We define contract power as the ability to exploit contractual gaps or failures of contractual provisions, which are strategically left incomplete. Empirical evidence from content analysis of antitrust documents supports the logic of contract power in the orange juice sector in three forms: avoiding changes to payment methods from weight to solid contents (quality); using information asymmetries to manipulate indexes that calculate the formula of orange prices; and deliberately harvesting oranges late in order to dehydrate the fruit, which consequently reduces weight and price. The paper contributes to understanding the selection of contract terms and the debate about how antitrust offices can deal with this issue.

Formato

text/html

Identificador

http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0080-21072016000100005

Idioma(s)

en

Publicador

Departamento de Administração da Faculdade de Economia, Administração e Contabilidade da Universidade de São Paulo

Fonte

Revista de Administração (São Paulo) v.51 n.1 2016

Palavras-Chave #contracts #power #measurement cost #agribusiness
Tipo

journal article