Fairness Asymmetry and Changes of Trust and Explicit Contracts in Buyer–Supplier Exchanges

Abstract

Despite the critical role of fairness in economic transactions, studies about asymmetric perceptions of fairness between exchange parties are very limited. By adopting a dyadic and dynamic perspective, the study investigates the impacts of fairness asymmetry on changes in trust and explicit contracts over time. With a two-wave longitudinal sample of 229 buyer–supplier dyads, the results show that over time, fairness asymmetry leads to a decrease of shared trust and an increase of explicit contracts. Our findings also reveal that both market uncertainty and behavioral uncertainty make the effect of fairness asymmetry on change in shared trust more adverse. Moreover, market uncertainty enhances the role of fairness asymmetry in developing explicit contracts. The study provides novel insights into the implications of fairness for formal and informal governance mechanisms in ongoing interorganizational relationships.