Contracting in Japan: The Bargains People Make When Information is Costly, Commitment is Hard, Friendships are Unstable, and Suing is Not Worth It

Entrepreneurs work with partial information about the products, and people, they are dealing with, and Ramseyer explores how they structured contracts, made credible commitments, obtained valuable information, and protected themselves from adverse consequences to create, maintain, strengthen, and leverage the social networks in which they operated.

Format: Hardback
Length: 225 pages
Publication date: 31 July 2023
Publisher: Cambridge University Press

Economic arrangements, as elucidated by economist Ramseyer, are meticulously crafted and executed with the aspiration and expectation that they will be executed with utmost care, intelligence, discretion, and effort. However, entrepreneurs navigate the realm of business with limited knowledge about the products and individuals they engage with. A prime example of this is observed in Japan, where Ramseyer delves into five distinct sets of negotiations and unconventional contractual arrangements among non-specialist businessmen and women. Through his exploration, Ramseyer uncovers how sake brewers secured and successfully marketed the elusive and challenging-to-grow sake rice, which perfectly encapsulated the unique terroir of the region. He also explores how Buddhist temples sought to mitigate the rapid decline in donations by engaging in unusual funerary contracts, and how pre-war local elites resorted to leasing instead of loans to finance local agriculture.

Ramseyer's examination of these entrepreneurs reveals their strategic approaches to contract structuring, the establishment of credible commitments, the acquisition of valuable information, and the protection against adverse consequences. By employing these strategies, these entrepreneurs were able to create, maintain, strengthen, and leverage the social networks in which they operated.

In conclusion, economic arrangements, as conceptualized by Ramseyer, are not mere abstractions but are meticulously designed and executed with the intention of fostering success and prosperity. The entrepreneurs who navigate the business world with limited knowledge and resources employ innovative strategies to overcome challenges and seize opportunities. Through their endeavors, they contribute to the growth and development of social networks, ultimately benefiting society as a whole.

ISBN-13: 9781009215725