How Do Informal Agreements and Renegotiation Shape Contractual Reference Points?

@article{Fehr2011HowDI,
  title={How Do Informal Agreements and Renegotiation Shape Contractual Reference Points?},
  author={E. Fehr and O. Hart and C. Zehnder},
  journal={Microeconomics: Asymmetric & Private Information eJournal},
  year={2011}
}
  • E. Fehr, O. Hart, C. Zehnder
  • Published 2011
  • Economics
  • Microeconomics: Asymmetric & Private Information eJournal
  • Previous experimental work provides encouraging support for some of the central assumptions underlying Hart and Moore (2008)’s theory of contractual reference points. However, existing studies ignore realistic aspects of trading relationships such as informal agreements and ex post renegotiation. We investigate the relevance of these features experimentally. Our evidence indicates that the central behavioral mechanism underlying the concept of contractual reference points is robust to the… CONTINUE READING
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