While some argue that incomplete incentive contracts facilitate the self-enforcement of informal dealings, other authors submit that they substitute for or 'crowd out' social norms supporting informal arrangements. We use experimental evidence to test these theories by manipulating the extent to...

Most empirical studies in contracting have analyzed contract length within an ex ante focus, when agents pre-specify the desired duration of the transaction as a contractual clause. The present study focuses on contract duration as defined ex post, meaning that the survival of contractual...

When there are constantly new, valuable opportunities to transact with alternative partners — a situation we refer to as exchange value uncertainty — long-term or committed transactions among the same individuals are discouraged. But when opportunism creates exchange hazards, which escalate in...