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Braiding: The Interaction Of Formal And Informal Contracting In Theory, Practice And Doctrine, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott
Braiding: The Interaction Of Formal And Informal Contracting In Theory, Practice And Doctrine, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott
Ronald J. Gilson
This article studies the relationship between formal contract enforcement, where performance is encouraged by the prospect of judicial intervention, and informal enforcement, where performance is motivated by the threat of lost reputation and expected future dealings or a taste for reciprocity. The incomplete contracting literature treats the two strategies as separate phenomena. By contrast, a rich experimental literature considers whether the introduction of formal contracting and state enforcement “crowds out” or degrades the operation of informal contracting. Both literatures, however, focus too narrowly on formal contracts as a system of incentives for inducing parties to perform substantive actions, while assuming …
Braiding: The Interaction Of Formal And Informal Contracting In Theory, Practice And Doctrine, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott
Braiding: The Interaction Of Formal And Informal Contracting In Theory, Practice And Doctrine, Ronald J. Gilson, Charles F. Sabel, Robert E. Scott
Ronald J. Gilson
This article studies the relationship between formal contract enforcement, where performance is encouraged by the prospect of judicial intervention, and informal enforcement, where performance is motivated by the threat of lost reputation and expected future dealings or a taste for reciprocity. The incomplete contracting literature treats the two strategies as separate phenomena. By contrast, a rich experimental literature considers whether the introduction of formal contracting and state enforcement “crowds out” or degrades the operation of informal contracting. Both literatures, however, focus too narrowly on formal contracts as a system of incentives for inducing parties to perform substantive actions, while assuming …