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New Frontiers in Empirical Research on Informal Contracting

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  • Ricard Gil
  • Giorgio Zanarone

Abstract

In standard models of informal contracting, parties use discretionary payments to split the known value of their relationship, which results in stable efficient contracts over time. Relaxing simplifying assumptions, recent models shed light on how informal contracts evolve over time, the creation of relational rents, and their sensitivity to path dependence. This paper investigates how these nonstand-ard theories of informal contracts can be tested empirically. We first discuss predictions from a selection of representative models, and strategies necessary to test them. We then examine how existing evidence supports these predictions, and how available data may be used for further testing.

Suggested Citation

  • Ricard Gil & Giorgio Zanarone, 2016. "New Frontiers in Empirical Research on Informal Contracting," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(2), pages 390-407, June.
    • Handle: RePEc:mhr:jinste:urn:sici:0932-4569(201606)172:2_390:nfiero_2.0.tx_2-2
    DOI: 10.1628/093245616X14545727832321
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    Cited by:

    1. Rocco Macchiavello, 2022. "Relational Contracts and Development," Annual Review of Economics, Annual Reviews, vol. 14(1), pages 337-362, August.
    2. Florian Englmaier & Guido Friebel & Gerd Muehlheusser & Andreas Roider, 2016. "Symposium on Evidence-Based Management," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 172(2), pages 305-311, June.
    3. Aldashev, Gani & Zanarone, Giorgio, 2017. "Endogenous enforcement institutions," Journal of Development Economics, Elsevier, vol. 128(C), pages 49-64.
    4. Macchiavello, Rocco & Morjaria, Ameet, 2022. "Empirical approaches to trust and relational contracts," International Journal of Industrial Organization, Elsevier, vol. 84(C).
    5. W. Bentley MacLeod & James M. Malcomson, 2023. "Implicit Contracts, Incentive Compatibility, and Involuntary Unemployment: Thirty Years On," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 179(3-4), pages 470-499.
    6. Ricard Gil & Giorgio Zanarone, 2018. "On the determinants and consequences of informal contracting," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(4), pages 726-741, October.
    7. Akifumi Ishihara, 2020. "On Multitasking and Job Design in Relational Contracts," Journal of Industrial Economics, Wiley Blackwell, vol. 68(4), pages 693-736, December.

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    More about this item

    JEL classification:

    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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