Theory and Decision

, Volume 80, Issue 1, pp 125–158 | Cite as

Repeated interactions and endogenous contractual incompleteness

Experimental evidence
Article

Abstract

This paper empirically investigates the interaction between repeated transactions and endogenous contractual incompleteness. We design an indefinitely repeated games experiment between identifiable players. In this experiment, the probability of continuation and the level of shared information vary over the treatments. The level of contractual completeness is decided by participants at each period. Our results show that past interactions are a stronger determinant of the level of investment in contractual completeness than the perspective of future business.

Keywords

Contractual incompleteness Cooperation Repeated games Reputation Experiment 

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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Centre d’Economie de la SorbonneParisFrance
  2. 2.Centre de Recherche en Economie et DroitParisFrance

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