Advanced Search
MyIDEAS: Login to save this article or follow this journal

The Role of Incomplete Contracts in Self-Enforcing Relationships


Author Info

  • Benjamin Klein


[eng] Incomplete contracts cannot be explained by focusing solely on the direct incentive effects of contract terms. The role of contract terms in facilitating self-enforcement must also be considered. Transactors avoid the costs of increased contractual specification, including the rigidity of explicit contracts, by using incomplete contract terms only to get close enough to desired performance so that the business relationship is self-enforcing over the broadest range of likely post-contract market conditions. Incomplete contract terms thereby efficiently complement transactors' limited reputational capital. [fre] Les contrats incomplets ne peuvent pas être expliqués en se fondant uniquement sur les effets incitatifs directs des termes du contrat. Le rôle joué par ces termes en matière d'auto-exécution de l'accord doit aussi être pris en considération. Afin d'économiser les coûts d'une multiplication des spécifications contractuelles, ces coûts incluant ceux de la trop grande rigidité des contrats explicites, les contractants stipulent des clauses d'incomplètude contractuelle qui leur permettent, après la signature du contrat, d'atteindre des niveaux satisfaisants de performances dans le plus grand nombre d'états du marché possible afin de garantir l'auto-exécution de l'accord. Les clauses d'incomplétudes contractuelles permettent de palier efficacement le caractère limité du capital réputation des parties.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL:
Download Restriction: no

File URL:
Download Restriction: no

Bibliographic Info

Article provided by Programme National Persée in its journal Revue d'économie industrielle.

Volume (Year): 92 (2000)
Issue (Month): 1 ()
Pages: 67-80

as in new window
Handle: RePEc:prs:recind:rei_0154-3229_2000_num_92_1_1037

Note: DOI:10.3406/rei.2000.1037
Contact details of provider:
Web page:

Related research



No references listed on IDEAS
You can help add them by filling out this form.


Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Elisabetta Iossa & Giancarlo Spagnolo, 2009. "Contracts as Threats: on a Rationale For Rewarding A while Hoping For B," CEIS Research Paper 147, Tor Vergata University, CEIS, revised 30 Sep 2009.
  2. Maria Bigoni & Giancarlo Spagnolo & Paola Valbonesi, 2010. "Sticks and Carrots in Procurement," "Marco Fanno" Working Papers 0105, Dipartimento di Scienze Economiche "Marco Fanno".
  3. Baker, George P. & Gibbons, Robert & Murphy, Kevin J., 2008. "Strategic alliances: Bridges between "islands of conscious power"," Journal of the Japanese and International Economies, Elsevier, vol. 22(2), pages 146-163, June.


This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


Access and download statistics


When requesting a correction, please mention this item's handle: RePEc:prs:recind:rei_0154-3229_2000_num_92_1_1037. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Equipe PERSEE).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.