For better or forever: Formal versus informal enforcement

• 成果类型: Article
• 署名作者: Sobel, J
• 署名单位: University of California System; University of California San Diego
• 刊物名称: JOURNAL OF LABOR ECONOMICS
• ISSN/ISSBN: 0734-306X
• DOI: 10.1086/499973
• 发表日期: 2006
• 页码: 271-297
• 关键词: Divorce; Vietnam; finance; LAW

摘要

This article contrasts supporting partnerships through relational contracting and supporting partnerships through formal legal institutions. A large population of players interact in bilateral relationships. Efficiency requires cooperation, but cheating yields a higher short-term payoff. There is a positive probability that the maximum feasible payoff available to a partnership decreases. Opportunistic behavior makes it impossible to realize the efficient outcome. A legal system can lead to efficient contracting. Without such a system, productive relationships arise in equilibrium if it is costly to initiate new relationships. This type of relational contracting tends to make partnerships last longer than is efficient.