The role of personal and impersonal relational contracts on partner selection and efficiency

Abstract In this article, we use a laboratory experiment to study the effects of relational contracts on market efficiency in environments with different degrees contract enforceability and competition. By exogenously varying communication protocol, create that are more personal or impersonal. On one hand, improve by promoting trust coordination. other impersonal increase facilitating severance trading relationships when productive competitors enter market. Therefore, overall effect depends relative importance competition agreement (JEL D91, L22, L14).