Abstract
ABSTRACT: Contracts constitute an important control mechanism. Their design is influenced by the preferences of the contracting parties, in addition to firm-level economic transaction costs. This study conducts an experiment to explore the antecedents of preferences for a less complete contract in a trade setting. Results from an experiment indicate that the preference for a more complete versus a less complete contract depends on the perceived riskiness of the incomplete contract, which is influenced by the perceived bargaining power and fairness preferences (namely, distributive and procedural fairness preferences) of the contracting parties. In other words, we find evidence that suggests that choosing the completeness of a contract is a form of risk-taking, and that the preference for a more incomplete contract is influenced by perceived power and fairness preferences.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
