Neither gift nor loan: the strategic use of pseudo-formality at the nexus of intimacy and economy

Abstract

Abstract In this paper, I introduce the concept of pseudo-formality as a novel form of relational work in economic sociology. Pseudo-formality refers to the performative use of formal aesthetics, such as contracts and repayment plans, in financial exchanges between close ties—as both parties tacitly understand that the agreement is flexible and not legally binding. I argue that pseudo-formality works by leveraging the signaling function of formal market elements in a way that contradicts their typical purpose, allowing for the compartmentalization of the economic and social aspects of the exchange. Through two complementary vignette experiments, I demonstrate that pseudo-formal framing enhances the perceived dignity of the recipient and the respect conveyed by the giver, compared to formal, informal, or gift-based arrangements. This effect partially mediates the relationship between the type of exchange and its overall acceptability. This research contributes to relational work perspectives in economic sociology by identifying a prevalent but understudied strategy for navigating the intersection of intimacy and economy, and highlights the adaptability of economic forms for relational purposes. The findings have practical implications for interpersonal exchanges as well as the design of financial assistance programs and policies, suggesting that pseudo-formal structures can provide a dignified and empowering means of support.