Home > General Business News, Marketing > More Trust = Better Contract Performance

More Trust = Better Contract Performance

In a paper titled More Order with Less Law: On Contract Enforcement, Trust, and Crowding, researchers Iris Bohnet, Bruno S. Frey and Steffen Huck describe simulates contractual environments in which subjects formed agreements under two conditions: strong enforcement and weaker enforcement. Surprisingly, stronger enforcement didn’t always result in higher levels of successful performance per the agreement. According to the authors, weaker performance “crowds in” trust. In other words, when an agreement is made in an environment of limited contract enforcement, the parties depend on trust to a greater degree and performance can actually increase.

via Stronger Contracts, Less Trust | Neuromarketing.

Advertisements
  1. No comments yet.
  1. No trackbacks yet.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: