Formal and Informal Contracting: Theory and Evidence

Posted: 26 Oct 2017

See all articles by Ricard Gil

Ricard Gil

Queen's University (Canada) - Smith School of Business

Giorgio Zanarone

Washington University in St. Louis - John M. Olin Business School; CUNEF

Date Written: October 2017

Abstract

In this article, we review the emerging economic literature on formal and informal contracting. Two patterns emerge from this literature. First, the use of informal contracts to complement formal ones is widespread, both within and between firms. Second, informal contracts are limited by the expectation of future collaborations between the parties. Our review suggests that there are significant opportunities for further integrated research in economics, law, and social sciences to enhance our understanding of the interaction between formal and informal contracting within firms, as well as in nonfirm organizations.

Suggested Citation

Gil, Ricard and Zanarone, Giorgio, Formal and Informal Contracting: Theory and Evidence (October 2017). Annual Review of Law and Social Science, Vol. 13, pp. 141-159, 2017, Available at SSRN: https://ssrn.com/abstract=3059633 or http://dx.doi.org/10.1146/annurev-lawsocsci-110316-113413

Ricard Gil (Contact Author)

Queen's University (Canada) - Smith School of Business ( email )

Smith School of Business - Queen's University
143 Union Street
Kingston, Ontario K7L 3N6
Canada

Giorgio Zanarone

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1133
St. Louis, MO 63130-4899
United States

CUNEF ( email )

Leonardo Prieto Castro 2
Madrid, Madrid 28040
Spain

HOME PAGE: http://gzanarone.cunef.edu

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