Publication: The complementarity between trust and contract enforcement
The complementarity between trust and contract enforcement
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Bartling, B., Fehr, E., Huffman, D., & Netzer, N. (2024). The complementarity between trust and contract enforcement (No. 377; Working Paper Series / Department of Economics).
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Agreements are rarely fully enforceable, exposing trading parties to some risk of exploitation. In such circumstances, trust - defined as the belief in the trustworthiness of others - seems important for realizing gains from trade. This paper explores an unstudied question: whether trust is a substitute for, or a complement to, the availability of contract enforcement opportunities. One intuition suggests that trust becomes more important when contract enforcement is weak, implying that they are substitutes. We show, however, that tru
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Bartling, B., Fehr, E., Huffman, D., & Netzer, N. (2024). The complementarity between trust and contract enforcement (No. 377; Working Paper Series / Department of Economics).
