The Role of Contract Framing in the Emergence of Trust: Evidence from Franchise Contract Experiment

Academy of Management Best Paper Proceedings, 2010

8 Pages Posted: 3 Feb 2016

See all articles by Laurent Bertrandias

Laurent Bertrandias

University of Toulouse 1

Marc Frechet

University of Toulouse

Fabrice Lumineau

Purdue University

Date Written: February 2, 2016

Abstract

Contracts and trust are both seen as important aspects of successful collaboration between trading partners. However, the interplay between these two dimensions remains poorly understood. In this paper, we draw upon a framing-based perspective to study the influence of the nature of the contractual design on the level of trust. We suggest that the type of contract framing plays a key role in shaping the development of trust. Our empirical analysis uses a quasi-experiment to compare promotion-framed versus prevention-framed franchise contracts. Consistent with our hypotheses, our results indicate that promotion-framed contracts influence more positively trust than prevention-based contracts. We also find that perceived contract completeness and perceived control of the franchisor have different effects on trust according to the type of contract framing. We point out the importance of our study for the contract-trust relationship debate and discuss its implications for the contract design literature.

Suggested Citation

Bertrandias, Laurent and Frechet, Marc and Lumineau, Fabrice, The Role of Contract Framing in the Emergence of Trust: Evidence from Franchise Contract Experiment (February 2, 2016). Academy of Management Best Paper Proceedings, 2010. Available at SSRN: https://ssrn.com/abstract=2726730

Laurent Bertrandias

University of Toulouse 1 ( email )

Place Anatole France
Toulouse Cedex, F-31042
France

Marc Frechet

University of Toulouse ( email )

41 Allées Jules Guesde - CS 61321
TOULOUSE
France

Fabrice Lumineau (Contact Author)

Purdue University ( email )

610 Purdue Mall
West Lafayette, IN 47906
United States

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