Abstract
Prior work expanded the role of learning in transaction cost economics (TCE), suggesting that learning to contract positively impacts subsequent transactions through the development of contracting capabilities. However, learning to contract requires evaluating exchange behaviors in the focal exchange, recognizing their cause, and adjusting future contracts to encourage or avoid this behavior in subsequent exchanges. Contract frames and group-level attribution biases systematically influence this learning process. Prevention and promotion framed contracts lead focal firm employees to adopt distinctive definitions of learning and systematically influence attributions of credit and blame in the exchange. As a result, there are two different pathways for learning to contract, one in which the focal party employees learn how to improve the exchange over time and another in which they learn to continually increase safeguards against potentially opportunistic partners and decrease their firm’s responsibility in ...
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