Highway to hell: Can collaborative contracting be more than a road paved with good intentions?

Contract literature generally argues that buyers should design contracts to safeguard against self-interested suppliers. However, it could also be argued that suppliers, given their expertise, are better equipped to write contracts, indicating the need to collaborate with suppliers, if not give them the lead. This paper investigates two unique cases in which a supplier leads the contract design process. Preliminary results show that the suppliers are not able to write effective contracts. A plausible explanation seems to lie in the supplier’s honest incompetence rather than the self-interested behaviour that suppliers typically should display as assumed in current literature.