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Trust, Reciprocity, and Contract Enforcement : experiments on Satisfaction Guaranteed| old_uid | 2801 |
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| title | Trust, Reciprocity, and Contract Enforcement : experiments on Satisfaction Guaranteed |
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| start_date | 2007/05/11 |
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| schedule | 10h |
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| online | no |
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| summary | Theorists and policy analysts have convincingly argued that greater
trust makes a more efficient society by reducing the need for costly contracts.
At the same time, some experiments have suggested that reciprocity
is a potent substitute for law when compliance with contracts is imperfectly
enforced. This paper examines these issues within the context of a common
trust-building contract device: satisfaction guaranteed. We find that this
mechanism does indeed build trust and improve efficiency, but only if it is
externally enforced. Paradoxically, only one side of the transaction needs
the assurance of external enforcement. Offering a satisfaction guarantee
always increases trustworthiness of sellers, even when honoring it is fully
voluntary, but only elicits the trust of buyers when it is legally enforced. |
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| responsibles | Bourgeois-Gironde |
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