Abstract
In buyer-supplier relationships, pinpointing blame for failures and deciding whether to continue the relationship post-failure is crucial. An unbiased buyer should determine the extent to which a failure results from self-serving behavior of supplier, inefficient interactions, or their own actions purely based on facts. However, we argue that strategic importance based on share in buyer’s total supply spend and switching costs based on availability of alternative suppliers can bias these judgements. Through two experiments with 642 supply chain professionals, we find that failure attribution to a strategically important (vs. unimportant) supplier is less likely, and the bias is stronger for less costly failures. Moreover, the bias is stronger when the buyer knows that failure attribution to the supplier will definitely lead to contract termination. This tendency to avoid blaming the supplier despite supporting evidence when the corresponding corrective action is costly presents a harmful cognitive bias impacting buyer-supplier relationships.