Information and the persistence of private-order contract enforcement institutions: An experimental analysis Article Swipe
YOU?
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· 2016
· Open Access
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· DOI: https://doi.org/10.1016/j.euroecorev.2016.07.004
We study an experimental market in which some sellers are prone to moral hazard, and in which a private-order contract enforcement institution exists that can mediate trade and prevent sellers from reneging on their contractual obligations. Using the institution to resolve the moral-hazard problem is costly. We demonstrate that in this market, the utilization of the private-order contract enforcement institution may make public and private market signals uninformative and inhibit learning. We study whether this potential information externality can limit adaptation away from the private-order institution when it is efficient to do so. Consistent with theory, we find inefficient persistence when the institution is used, but by contrast, efficient adaptation in other situations. Providing information to individuals who are using the private-order institution allows them to partially adapt.
Related Topics
- Type
- article
- Language
- en
- Landing Page
- https://doi.org/10.1016/j.euroecorev.2016.07.004
- OA Status
- hybrid
- Cited By
- 2
- References
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- OpenAlex ID
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Raw OpenAlex JSON
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https://openalex.org/W2489866201Canonical identifier for this work in OpenAlex
- DOI
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https://doi.org/10.1016/j.euroecorev.2016.07.004Digital Object Identifier
- Title
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Information and the persistence of private-order contract enforcement institutions: An experimental analysisWork title
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articleOpenAlex work type
- Language
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enPrimary language
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2016Year of publication
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2016-07-17Full publication date if available
- Authors
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Tom WilkeningList of authors in order
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https://doi.org/10.1016/j.euroecorev.2016.07.004Publisher landing page
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YesWhether a free full text is available
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hybridOpen access status per OpenAlex
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https://doi.org/10.1016/j.euroecorev.2016.07.004Direct OA link when available
- Concepts
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Moral hazard, Enforcement, Private information retrieval, Institution, Order (exchange), Externality, Economics, Microeconomics, Adverse selection, Information asymmetry, Business, Public economics, Actuarial science, Incentive, Finance, Law, Computer science, Computer security, Political scienceTop concepts (fields/topics) attached by OpenAlex
- Cited by
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2Total citation count in OpenAlex
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2023: 1, 2017: 1Per-year citation counts (last 5 years)
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93Number of works referenced by this work
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10Other works algorithmically related by OpenAlex
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| corresponding_author_ids | https://openalex.org/A5075980651 |
| countries_distinct_count | 1 |
| institutions_distinct_count | 1 |
| corresponding_institution_ids | https://openalex.org/I165779595 |
| sustainable_development_goals[0].id | https://metadata.un.org/sdg/16 |
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| citation_normalized_percentile.is_in_top_10_percent | False |