Zur Wirksamkeit nicht bindender Verträge — Eine experimentelle Untersuchung

Bernd Irlenbusch () and Lars Schade ()
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Bernd Irlenbusch: Rheinische Friedrich-Wilhelms-Universität
Lars Schade: Industrie- und Handelskammer für München und Oberbayern

Schmalenbach Journal of Business Research, 1999, vol. 51, issue 7, 730-752

Abstract: Summary A huge amount of recent economic literature is devoted to the theory of incomplete contracts and to the analysis of what rational contractors can achieve given the exogenous incompleteness of contracts. But it is still an open question why contractors achieve much more than this in real life. A non binding contract can be seen as an extreme type of an incomplete contract. In this study we describe an experiment to investigate the behaviour of seilers and buyers if contracts are not binding. If the subjects are rational and merely money maximising there should be no trade at all. Nevertheless, a lot of trade is observed which is ensured by trust and reciprocity. Whereas trust appears to be predominant in the beginning of a business relation, there are hints that reciprocity is responsible for continuation. Our results show that the consideration of bounded rational behaviour can help to explain why in real life incomplete contracts are much more effective than contract theory predicts.

Date: 1999
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DOI: 10.1007/BF03371592

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