Iossa, Elisabetta; Spagnolo, Giancarlo - Istituto Einaudi per l'Economia e la Finanza (EIEF) - 2008
Contracts often reward inefficient tasks and are not enforced ex post. We provide an explanation based on the relationship between explicit contracts and implicit agreements. We show that signing but then ignoring contractual clauses requiring costly, inefficient, verifiable tasks (A) may...