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|Title:||Dealing with the Paradox of Embeddedness: The Role of Contracts and Trust in Facilitating Movement Out of Committed Relationships|
|Author:||Lazzarini, Sergio Giovanetti|
Miller, Gary J.
|Abstract:||When there are constantly new, valuable opportunities to transact with alternative partners a situation we refer to as exchange value uncertainty long-term or committed transactions among the same individuals are discouraged. But when opportunism creates exchange hazards, which escalate in non-recurring transactions, individuals will be reluctant to take full advantage of the gains from switching to more valuable partners, thereby leading to "overembedded" exchanges. Two mechanisms may encourage movement out of committed relationships in those conditions. First, formal contracts should serve as a safeguard to market participants, in the sense that they limit potential losses due to opportunistic behavior. Second, trust in general others (as opposed to trust in familiar people) reduces participants' perception of hazards in market exchanges and hence promotes transactions among strangers. By increasing the propensity to initiate new exchanges, general trust also diminishes the role of contracts in causing movement out of committed relationships. In this paper, we present experimental evidence largely consistent with this theory of the interplay between formal and informal mechanisms in the determination of social mobility.|
|Keywords (english terms):||Commitment|
|CNPq Area:||Ciências Sociais Aplicadas|
|Copyright:||O INSPER E ESTE REPOSITÓRIO NÃO DETÊM OS DIREITOS DE USO E REPRODUÇÃO DOS CONTEÚDOS AQUI REGISTRADOS. É RESPONSABILIDADE DOS USUÁRIOS INDIVIDUAIS VERIFICAR OS USOS PERMITIDOS NA FONTE ORIGINAL, RESPEITANDO-SE OS DIREITOS DE AUTOR OU EDITOR|
|Appears in Collections:||Coleção de Artigos Científicos|
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|R_2008_Artigo_Dealing with the paradox_TC.pdf||R_2008_Artigo_Dealing with the paradox_TC||6.53 MB||Adobe PDF||View/Open|
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