Relational Contracting: Complementarities with Behavioral and Experimental Economics

David Huffman

Journal of Institutional and Theoretical Economics (JITE), 2023, vol. 179, issue 3-4, 701-717

Abstract: This paper argues that experimental and behavioral economics complement traditional approaches to studying relational contracting, for two reasons. First, experiments have advantages in identifying core elements of relational contracting theory, despite limitations. Second, insights from experimental and behavioral economics suggest ways to expand or modify standard assumptions of relational contracting. The paper highlights studies illustrating these complementarities, including one testing predictions on involuntary unemployment through laboratory experiments. Another set of studies explores the benefits of social group membership in fostering successful relationships.

Keywords: relational contracting; contractual incompleteness; social groups; complexity; relationalcontracting; contractualincompleteness; socialgroups (search for similar items in EconPapers)
JEL-codes: D9 J08 J33 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1628/jite-2023-0049

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