Relational Contract and Endogenous Contractual Incompleteness. Experimental Evidence.

Jean Beuve (IAE - University of Paris 1)
Claudine Desrieux (ERMES - University of Paris 2)

Abstract: This paper empirically investigates the interaction between relational contracting and endogenous contractual incompleteness. We design an infinitely repeated games experiment between identifiable players, where the probability of continuation and the level of shared information vary, and the level of contractual completeness is decided by participants. Our results allow us to show that relational contract can be regarded as a determinant of contractual incompleteness.

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